Maryland motorists will pay a slightly higher gasoline tax beginning next month, though the change is so small that many drivers may barely notice it.
The Office of the Comptroller on Monday announced a new gas tax rate of 46.6 cents per gallon, reflecting an increase of 0.6 cents compared to last year. It marks the first rise after two consecutive years of modest declines. The state levy comes on top of the federal fuel tax of 18.4 cents per gallon.
Robert Rehrmann, director of the Board of Revenue Estimates, said the adjustment was not influenced by geopolitical tensions in the Middle East, including the Iran-related conflict.
“Although Middle East geopolitical shocks triggered a spike in gasoline prices beginning in early March, the average price over the full 12-month determination period was lower than the prior year,” Rehrmann noted.
He added that the new rate remains slightly below the level recorded in July 2023, when the tax increased by seven cents per gallon. The latest adjustment translates to about six extra cents in tax on every 10 gallons of fuel.
Rehrmann also warned that global instability could still affect future fuel prices.
“Global oil markets are unpredictable, but any sustained increase in gasoline prices will be reflected in next year’s determination,” he said.
According to AAA, the national average price for regular gas stood at $4.507 per gallon a week ago, while Maryland’s average was $4.416. On Monday, Maryland prices averaged $4.17 per gallon, still about $1.12 higher than the previous year.
AAA also noted shifting market conditions, saying: “Crude oil prices have been going down this week amid reports of peace talks with Iran. But the fragile situation could cause oil prices to spike again if a ceasefire deal isn’t reached.”
By law, Maryland’s comptroller must announce the annual adjustment by June 1 for implementation on July 1.
The state’s gas tax is calculated using two components: inflation and wholesale fuel prices. A 2013 law linked part of the tax to the Consumer Price Index, allowing only upward adjustments capped at 8%, while another portion fluctuates with wholesale gas costs.
Inflation of 2.8% contributed an increase of 0.9 cents this year, partly offset by a slight drop in wholesale prices.
Republican lawmakers criticized the automatic formula, arguing it places additional strain on residents.
“This latest increase reveals a fundamental flaw in Maryland’s gas tax equation – that in some of the most difficult economic times, this tax will increase because of the automatic formulas the Democratic majority pushed through a decade ago,” said House Minority Whip Del. Jesse Pippy.
He added that rising fuel costs are already burdening families, calling the system “unconscionable” and “unsustainable,” while pointing to broader tax increases in the state.
Republicans say they will renew efforts to scrap the automatic inflation-based increases if lawmakers return for a special legislative session this summer.
