March 24, 2004 – A new gasoline tax that officially took effect on Tuesday isn't being collected yet because distributors have failed to return revenue surveys aimed at determining why motor fuel in the territory sells for anywhere from 38 cents more than to 39 cents less a gallon than the national average, according to Licensing and Consumer Affairs Commissioner Andrew Rutnik.
According to AAA, the average price of regular unleaded gas across the nation hit a record of more than $1.73 a gallon on Tuesday.
With Hovensa, the second-largest oil refinery in the Western Hemisphere, on St. Croix, it's no surprise that motorists on the island pay around $1.34 a gallon, Rutnik said on Tuesday. What he wants to know, and what politicians have been asking for years, is why the pump price for motorists on St. Thomas and St. John, just 40 miles away, is about $2.11 a gallon.
"That's the burning question on everyone's mind," Rutnik, a St. John resident, said. "Why should they pay more?"
Hovensa sells gasoline directly to retailers on St. Croix, but not to those on the other islands.
The government's new Flexible Petroleum Tax, which was to go into effect on Tuesday, is aimed at lessening the impact on consumers by fluctuating with changes in gas prices, Rutnik said. As prices rise, the tax rate will decline; when prices drop, the tax rate will go up.
Licensing and Consumer Affairs sent its survey, which asks questions regarding profits and service costs, to about 40 gas stations, wholesalers and marinas. As of Tuesday, 14 stations and one wholesaler had yet to return their forms properly filled out.
The new tax may end up replacing the local tax of 14 cents a gallon that has been in place since the early 1980s, Rutnik said. But he said that decision won't be made, nor will the tax be collected, until all of the completed surveys have been received so that Licensing and Consumer Affairs can review the fuel suppliers' gross profit margins.
Rutnik added that the Flexible Petroleum Tax may be collected retroactively. "It's law right today," he said on Tuesday. "That doesn't mean we have to collect it today."
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