Gas prices are at their highest level since 2008, fueled only in part by Russia’s invasion of Ukraine. The fact is gas prices have been going up steadily since President Biden was sworn into office.
Tom Kloza, the Global Head of Energy Analysis at Dow Jones’ Oil Price Information Service pointed out in a recent interview that the retail price of a gallon of gasoline rose by 25% in the last two months and by a whopping 70% since President Biden took office. He also said the issue dates back to the 2008 recession-related bankruptcies resulting in falling investments in Domestic oil companies leading to less drilling and higher gas prices.
Additionally, U.S. oil production slowed considerably because demand drastically fell during the pandemic; causing companies to pause production, rather then sell oil too cheaply. Now that the world is coming out of the pandemic, the demand for fuel has grown faster than worldwide production can meet, pushing the price of gas even higher. The lack of production in the United States is also due in part to anti-fossil fuel policies adopted and promulgated by the Biden administration, despite attempts by the President and his team to deflect sole responsibility for price spikes to Russian President Vladimir Putin.
So, how does “Putin’s War” affect oil prices? President Biden was asked directly about the possibility of increased gas prices resulting from his actions, and answered, “They’re gonna go up.” When pressed on what he was going to do about it, the President said, “Not much I can do right now, Russia’s responsible.”
The price of oil is set on the world market and oil is globally traded. Choking off supply from Russia is necessary to bankrupting Putin’s war machine, but the ban on Russian oil could result in even higher prices for gas and oil in the future.
That leads us to the cost of gasoline in Illinois. While oil production is a variable the State of Illinois cannot control, it can control the amount of tax it charges at the pump per gallon of gas. Passing legislation introduced by House Republicans would mean much needed relief for families finding it hard to make ends meet due to the massive spike in gas prices.
Illinois sales tax on gasoline is not a flat amount, but a percentage of the sale, currently set at 6.25%. This percentage doesn't change no matter if the price of gas skyrockets. As the price of a gallon of gas goes up the state collects even more sales tax revenues. Long-term high-priced gas nets a huge windfall for the state. House Republicans legislators strongly believe that windfall should be shared with Illinoisans in the form of a tax break. They have introduced HB 5723, legislation that would cap the amount of tax that can be charged at the pump. The cap could result in a savings of 10 to 20 cents, or more per gallon.
What’s more, the netted dollars from the windfall were not figured into the budget, so no state programs would be impacted. Additionally, the approach taken in HB 5723 is different from other proposals because it doesn’t affect the portion of the motor fuel tax that is used for roads. What it does do is provide a much-needed break for families experiencing financial hardship.
House Republicans are also sponsoring HB 5481, legislation that would suspend the additional sales tax on motor fuel when the rate of inflation as measured by the Consumer Price Index is more than 3% over the previous 12-month period. If enacted, the bill would lead to immediate savings at the pump for Illinois motorists. No one can argue at this point that the people of Illinois and the citizens of the United States of America need a financial break. The rising cost of gas and diesel has caused the price of everything to go up. Inflation has hit forty year highs in every month of 2022 so far, with no relief (and no plan from Democrats) in sight.
House Republicans are offering solutions that would lead to immediate relief for working individuals and families. The only thing standing in the way is the Democrat majority, content with the status quo. So far, not even one subject matter hearing has been held to entertain House Republican relief proposals. The time for action is now. Families cannot wait any longer.
The only thing standing in the way of the relief is the Democrat majority who now must consider the proposal.