Maine Facing July 1 Fuel Tax Hike

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Maine Facing July 1 Fuel Tax Hike

AUGUSTA, Maine -- Gasoline and diesel fuel will be a few cents more expensive tomorrow as taxes rise due to a year-old state law. For the first time, Maine's motor fuel taxes will be indexed to inflation. A major auto travelers' group grudgingly accepts the 2.6-cent-per-gallon gas tax hike, while a truckers' organization says the 2.7 cent rise in the diesel levy hits at a bad time.

The actual increases that motorists see at the pump will likely be a few tenths of a cent higher than the added taxes. Retailers typically mark their pump prices to end with .9 cent. With gas taxes going up to 24.6 cents and diesel to 25.7 cents per gallon, they're not likely to start charging prices ending with .5 or .7 cent, said Matt McKenzie of AAA's Maine's Portland office.

More likely, retailers will ratchet their prices up to the next .9 cent per gallon. "We'll see an increase of 3 cents per gallon," McKenzie told the Associated Press.

The statewide average price in Maine last week was $1.46, well over the $1.37 price of a year ago, according to the AAA. The AAA has yet to hear complaints from motorists, McKenzie said. The travel organization itself scrutinized the increased levy and weighed it against the alternative -- seeing Maine's highway and bridge maintenance and improvement program suffer, he said.

The Maine Motor Transport Association acknowledged the state needs the money for transportation expenses, but said truckers have had a tough year with their fuel prices rising 15 to 20 percent over 12 months.

"It certainly comes at a tough time for everybody," said Dale Hanington, president of the truckers' organization.

Maine gasoline retainers located near the border with New Hampshire will be put at a greater competitive disadvantage because the Granite State's gas tax -- 18 cents a gallon -- is relatively cheap, said Jamie Py, president of the Maine Oil Dealers Association (MODA). For retailers competing head to head, a 7 cent-per-gallon difference is "huge," he said.

The price jump also puts gasoline retailers in an awkward spot because it will prompt questions and complaints from their customers, said Jim McGregor, vice president of the Maine Merchants Association.

Anticipating questions from consumers, convenience store owners and other retailers asked the oil dealers' group for stickers they can put on their pumps explaining why gas taxes are going up, said MODA's Py, who had 1,000 of the stickers printed.