The North Carolina General Assembly overwhelmingly approved legislation Wednesday that would temporarily suspend the state’s 41-cent-per-gallon gasoline tax through Nov. 30, potentially providing relief to drivers facing sharply higher fuel prices.
The measure passed the Senate unanimously, 41-0, and cleared the House 111-1.
The legislation now heads to Gov. Josh Stein.
If signed into law, the suspension could provide some relief to North Carolina drivers who have watched gasoline prices climb sharply in recent months. However, motorists should not necessarily expect prices at the pump to immediately fall by the full 41 cents per gallon.
Gas stations may initially be selling fuel purchased before the tax suspension takes effect, and changes in wholesale fuel prices could also affect what consumers ultimately pay. Lawmakers supporting the measure said competition among stations should eventually push at least some of the savings to consumers.
The temporary suspension would come at a substantial cost to state transportation funding.
The North Carolina Department of Transportation estimates a one-month suspension would reduce its revenue by approximately $225 million. If the suspension begins in mid-October and continues through Nov. 30, the cost could reach $300 million or more.
Legislative leaders have proposed using state reserves to replace the lost transportation revenue rather than reducing funding for road and bridge projects.
State Treasurer Brad Briner told WRAL that North Carolina has approximately $11 billion in reserves and could financially absorb the cost, although he said lawmakers would have to decide whether that was the best use of those funds.
Stein has expressed support for providing relief at the pump but has raised concerns about protecting transportation funding. He said Tuesday that any plan should ensure NCDOT’s road and bridge work is not harmed.
North Carolina’s average price for regular gasoline is approximately $4.03 per gallon, according to AAA. That’s up from $3.84 a month ago and $2.82 a year ago.
Diesel prices have risen even more sharply, with North Carolina’s average at approximately $6.01 per gallon.
The legislation also extends relaxed rules allowing highway use of tax-free red-dyed diesel through the end of the year.
If signed by Stein, the gas tax suspension could take effect within days.
Source: WRAL News reporting and North Carolina General Assembly vote results.
