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Wednesday, July 2, 2014

Four-cent gas tax increase takes effect Tuesday, but prices at the pump generally the same

CONCORD – New Hampshire raised its gasoline tax 4 cents a gallon Tuesday, but most motorists failed to see any difference at the pump.

The increase was the first in 23 years and comes just before one of the busiest times of the year for travelers – the July Fourth holiday weekend. ...

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CONCORD – New Hampshire raised its gasoline tax 4 cents a gallon Tuesday, but most motorists failed to see any difference at the pump.

The increase was the first in 23 years and comes just before one of the busiest times of the year for travelers – the July Fourth holiday weekend.

A Telegraph survey of five stations in the Nashua-Hudson area found that only one had raised its gasoline prices to match the increase.

An employee at Shell Station at 301 Main St. reported that all grades of gasoline went up 4 cents Tuesday, with the new price for regular unleaded set at $3.73.

He declined further comment.

More typical was Chuck Lambert’s day as manager of the Hess station at 543 Amherst St.

“We haven’t gone up in price at all. I think the overall effect here will be on the margin,” said Lambert, whose station charged $3.67 for regular Tuesday.

The Hess station hadn’t received its weekly load of gasoline, and prices could change as a result, he said.

New Hampshire’s average gas price remained the same Tuesday as the day earlier, $3.65 a gallon.

The national average gas price Tuesday was $3.68, according to GasBuddy.com.

Critics of the gas tax increase said national prices already went up significantly in June, ending a trend in past years of dropping gas prices leading up to the holiday period.

AAA has forecast that the prices motorists will pay this weekend will reach a six-year high.

The group leading the campaign against the gas tax increase was not surprised that many stations haven’t changed their pump price just yet, its leader said Tuesday.

“You’ve really got to wait a week to see the differential between us and Massachusetts, to see how retailers really respond to this 23 percent tax hike,” said Greg Moore, state director of Americans for Prosperity.

As of Tuesday, 28 states had lower average gas prices than New Hampshire, but the Granite State had the lowest prices in all of New England.

The average price of gas sold in Massachusetts on Tuesday was $3.72, roughly 61⁄2 cents more per gallon than here.

“GasBuddy.com usually shows a lag,” Moore said.

Gov. Maggie Hassan supported the tax hike because it will pump $32 million more each year for road and bridge repair.

More than 40 percent of the increase is devoted to paying off 20-year bonds for the final piece of widening Interstate 93 from Salem to Manchester.

Under the bill that Hassan signed into law last month, once those bonds are paid off in 2018, the gas tax rate will go back down to 18 cents a gallon.

“A solid, modern transportation infrastructure is the foundation for long-term economic growth and is critical to the success of New Hampshire’s people and businesses, which is why Governor Hassan, legislators from both parties, the Business and Industry Association, various chambers of commerce and other representatives of the business community came together to support the bipartisan transportation funding bill,” said William Hinkle, Hassan’s press secretary.

Gas tax supporters in the Legislature maintained that the 4-cent increase would have little, if any, effect on gas prices here.

“The increase – the first in 23 years – is 23 percent, while gasoline prices have risen over 300 percent,” said state Rep. David Campbell, D-Nashua, who led the legislative charge for several years to raise the tax to repair the state’s ailing infrastructure.

“The cost of asphalt, cement, steel and road salt has risen over 300 to 400 percent or more. Each year we delay repairs, it costs taxpayers millions.”

Campbell has said gas tax increases in Massachusetts, Vermont and Maine in recent years all did not lead to significant price spikes at the pump in those states.

AFP sponsored a protest Monday of the gas tax increase at the Mr. Gas station in Hooksett, owned by Toni Aoude.

But Aoude confirmed during a telephone interview that he, too, kept prices the same Tuesday at that station and ones he owns in Londonderry and Raymond, because he couldn’t afford to increase them.

“I am going to be honest: I would love to change my prices, but I can’t, because of the competition,” Aoude said. “All the major chains buy in advance and in bulk, so they can keep the price lower for a while. Until they move, I can’t.

“In the meantime, this tax just eats into my profits, and I’m sure that’s true for many in this business today.”

The cost of regular unleaded at Mr. Gas on Tuesday was $3.59 a gallon.

Aoude said he did raise his price 4 cents a gallon last week – not because of the impending state tax hike but because of the escalating price he paid for gas from his distributor.

“I’ve been told that the price I’m paying is 20 cents per gallon over the market,” Aoude said. “The oil companies are watching what’s been happening in Iraq, and they’ve responded by pushing up the price now rather than having to do it later.”

Moore insisted that the state tax hike will have the most severe impact on station owners facing stiff price competition among their neighbors in the same town and from owners just over the border.

“I’ve been told the profit margin for many on unleaded gas at high-volume places like that can be 5 cents a gallon. If you don’t raise the price and just eat it, there goes 80 percent of your profit,” Moore said.

Robert Sculley, of Merrimack, heads the New Hampshire Motor Transport Association, which also fought the tax hike and estimates that it will cost the average trucker $750 a year.

The ones Sculley worries most about are those in northern part of the state, who already face higher average prices and have longer distances to travel.

“I don’t know how they are going to make ends meet,” Sculley said.

“I filled up in Errol today, and the guy in the car next to mine put in only 4 gallons of gas – $15. That’s all he said he could afford. I think we’re going to see more and more of that this summer.”

Kevin Landrigan can reached at 321-7040 or klandrigan@nashuatelegraph.com. Also, follow Landrigan on Twitter (@Klandrigan).