Arkansas among top 10 states in gasoline consumption, low pump prices lead to more miles on roads

by Wesley Brown ([email protected]) 738 views 

As pump prices hover near or below $2 a gallon, Arkansas drivers are putting more miles on their cars as the state landed among the top 10 states with the highest percentage increase of total gasoline consumption in the first half of 2016.

According to monthly fuel data on gallons of gasoline taxed by the state and reported to the U.S. Department of Transportation, Arkansans consumed more than 752 million gallons of gasoline through June, up 5.5% over the same period a year ago.

Arkansas is also on pace to move beyond the 1.47 billion gallons of gasoline consumed by drivers in all of 2015, the highest amount on record and third straight year total consumption rose from the previous year, DOT shows. Nationwide, American vehicles consumed 71.8 billion gallons of gasoline in the first half of the year, an increase of 3% over the same period a year earlier. It is the highest amount on record and the sixth consecutive increase in national gasoline consumption for the six-month period ending June 30, 2016.

The data, reported in the Federal Highway Administration’s (FHWA) “Monthly Motor Fuel Reported by States,” shows the South Gulf – the eight-state region that includes Arkansas and stretches from Texas to West Virginia – had a 4.1% increase, the largest percentage increase of any region in the country.

California led the nation in gasoline consumption with 7.65 billion gallons, followed by Texas at 7.1 billion gallons and Florida at 4.57 billion gallons. Oklahoma consumed 8.2% percent more gasoline in the first half of the year compared to the same period in 2015, topping the list for the state with largest percent increase. Delaware and Utah followed closely with 7.9% and 7.2% increases, respectively.

Rounding out the top 10 were Tennessee (6.1%), Idaho (5.9%), Arkansas, Missouri (5.3%), Oregon (4.9%), Indiana and New York at 4.6% and 4.5%, respectively. North Dakota’s fuel consumption decreased by 5.9%, the largest decrease among the states in that period. Kansas, Louisiana, Maryland, New Mexico and the District of Columbia were the other states that consumed fewer gallons of gasoline in the first six months of 2016 compared to a year ago.

In Arkansas, the state’s motor fuel (gasoline) tax now stands at 21.5 cents per gallon, above the national average of 18.4 cents and among the 15 states with the lowest tax on gasoline and diesel fuels. According to the U.S. Energy Information Administration (EIA), fuel taxes and fees across the U.S. ranged from a low of 8.95 cents per gallon in Alaska to a high of 51.4 cents per gallon in Pennsylvania. The average per gallon tax among the states and territories is 25.052 cents.

State-level taxes and fees on motor fuels in the U.S. averaged 26.5 cents per gallon as of Jan. 1, 2016, and budget officials in some states are considering raising or lowering gas taxes while regions are seeing pump prices below $2 per gallon for regular unleaded.

In its short-term energy outlook on Oct. 13, the EIA noted that U.S. gasoline consumption in September reached a record high for that month, continuing the trend of year-over-year growth in gasoline consumption seen in 2016.

“Increased travel, because of a combination of generally low gasoline prices, growing employment, and rising wages, has likely contributed to continued growth in gasoline consumption this year,” the EIA said.

Today’s (Oct. 31) average price for regular unleaded gasoline is $2.21 per gallon, which is one cent cheaper than one week ago, the same price compared to one month ago and three cents more than the same date last year. National gas prices have now dropped for six consecutive days, but the usual seasonal decline has stalled as prices have remained roughly the same since early September.

Drivers may continue to see prices wobble up and down as traders speculate on the possibility of OPEC countries developing an output agreement over the next month, AAA said. Additionally, planned and unplanned refinery maintenance continues across the United States and may result in regional fluctuations in gas prices.

The nation’s top five least expensive markets for a gallon of regular unleaded are Missouri ($1.99), Oklahoma ($1.99), Arkansas ($2.01), South Carolina ($2.01), Kansas ($2.02). The nation’s top five most expensive markets include Hawaii ($2.91), California ($2.79), Washington ($2.73), Alaska ($2.63), Oregon ($2.55).

The higher fuel consumption in Arkansas could figure into budget talks going into the 2017 legislative session. This summer, Gov. Asa Hutchinson challenged the pro-highway Good Roads Foundation to come up with a long-term highway planning agenda for the upcoming legislative session without raising taxes.

More than a year ago, the Good Roads group crossed ways with the governor and some lawmakers in the governor’s Working Group after recommending an increase in the state’s motor fuel taxes of 10 cents per gallon to raise $125.7 million for state highway needs.

Eventually, during a special session in late May, Hutchinson signed a five-year highway plan that will raise about $50 million a year over the next five years in order to make the state eligible for $200 million a year in federal matching funds. For fiscal 2017, the state would make a one-time transfer of $40 million in rainy day funds to the Highway Transfer Fund, which took place in late September.

In the future, the Highway Transfer Fund would be financed by deposits of 25% of state surplus funds. A Securities Reserve Fund would generate $1.5 million for the Highway Transfer Fund in fiscal year 2017 and $20 million in the following years. The bill also would dedicate to highways money generated by diesel taxes as well as revenues from the half-cent sales tax passed by voters in 2012. Some of those tax dollars go into general revenues.