[refurb]

$100 to $60 is a 40% drop in the price of oil.

The price of gas is only partially due to the cost of oil. Taxes make up a pretty chunk of the cost of gas. On average $0.50/gal.[1]. Don't forget the cost of refining and transportation. This chart says 62% of the cost of gallon is due to crude oil costs[2]

So based on your $3.60/gal, $2.23/gal is oil. Reduce that by 40%, you get $1.33 and add back in the other stuff and I get $2.70/gal now.

Not far off huh?

[1]http://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States [2] http://www.eia.gov/petroleum/gasdiesel/

[desdiv]

Does anyone know why fuel taxes are calculated by volume instead of value? That's the opposite of pretty much every other tax on goods in the country.

[phil21]

Because fuel taxes are supposed to be an approximation of how many miles you drive, aka how much wear and tear you put on the road infrastructure.

You put the same wear and tear on the road at $1/gal vs. $4/gal. Trying to create budgets against a commodity that rapidly changes prices as much as gas/diesel does would be rather difficult.

For example, in 2015 we'd be forecasting huge budget shortfalls for any planned road maintenance due to the unforseen huge drop in gas prices.

[ta75757]

From what I've read ordinary passenger vehicles put just about no strain on modern roads. Only heavy vehicles like semis do.

Tax is tax, money is fungible.

[superuser2]

Even if this is true, the business owners' argument to Congress would be that the consumer will pay for it either way; businesses that depend on transportation would just raise prices to compensate.

[forgotpasswd3x]

I believe that it should the cost to repair roads should be the responsibility of those who cause the damage. Yes, this would raise cost of goods shipped via truck. If you're ordering things that need to be shipped via truck, you should be responsible for that damage.

Why should I be taxed to fix road damage based on a metric that doesn't begin to accurately reflect my actual contribution to the problem?

Additionally, if the trucking industry had to raise rates due to a higher 'road maintenance tax' this may also make more efficient forms of transportation more popular, ie trains.

[ta75757]

I am not opposed to the tax, I simply think it's pointless to talk about what it's "for". That's what I meant to convey with the second line. It's a tax. If you don't pay this one, you'll pay another. And the government will spend the money where/how it sees fit.

[ThrustVectoring]

Fuel taxes are typically allocated towards road construction and maintenance. Fuel use is roughly proportional to road use, so it's roughly a tax that makes road users pay for their portion of road use.

The fact that more fuel-efficient drivers pay less taxes is a bonus, since fuel use has negative externalities.

[tracker1]

Depends on the commodity... cigarette taxes, for example, or other sin taxes...

Personally, I don't understand why we don't have more flexible tariffs in place to secure against this kind of influence.

[dawkins]

but when oil price goes up, even very little, gas price follows inmediately and proportionally. At least that is the impression I get here in Spain.

[refurb]

Good article explaining the economics of gasoline prices...

http://www.salon.com/2014/12/12/like_low_gas_prices_so_does_...