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Rhode Island Gas Prices Steady Amid Tax Hikes

Current gas prices at a Rhode Island gas station as of July 2023.

News Summary

As of July 28, Rhode Island gas prices are steady at $3.02 per gallon, marking a slight decrease from last week. However, a new gas tax proposal set to increase the tax by 2 cents to 41 cents per gallon raises concerns for residents. Utility challenges persist, with potential energy rate hikes looming. The state aims to address its budget deficit through these measures, sparking debate about the economic impact on families already facing rising costs.

Rhode Island Gas Prices Steady Amid Gas Tax Increase and Utility Challenges

As of July 28, gas prices in Rhode Island are holding steady at $3.02 per gallon, reflecting a slight decrease of one cent or 0.4% compared to the previous week. Over the past year, gas prices have seen a significant decline of 40 cents or 11.7%.

Diesel prices have remained unchanged this past week at $3.81, but they have also dropped by 30 cents or 7.3% over the last year. The historical peak for gas prices in Rhode Island was $5.02 on June 13, 2022, while the highest diesel price recorded was $6.47 on May 18, 2022.

New Gas Tax Proposal

The state is facing a variety of challenges, including ongoing utility rate increases and a newly proposed gas tax increase. The new budget for fiscal year 2026, set at $14.3 billion, was approved by a vote of 66 to 9. The budget aims to address a $185 million deficit and includes a 2-cent increase to the gas tax, set to take effect on July 1. This will raise the total gas tax for drivers in Rhode Island to 41 cents per gallon, making it the 10th highest in the U.S. When combined with the federal gas tax of 18.4 cents, Rhode Island drivers will soon be paying nearly 60 cents in gas taxes per gallon.

For comparison, Massachusetts charges a gas tax of 27.4 cents per gallon, while the national average stands at 33 cents.

Implications of the Budget and Gas Tax Increase

Supporters of the proposed budget argue that the tax increases will help to invest in the state’s infrastructure and enhance services. However, opponents contend that these hikes will place an additional burden on working families already coping with fluctuating gas prices.

The implications of rising costs are particularly concerning as energy rates in Rhode Island edge toward the highest in the country. Proposed rate increases for electricity could see average residential monthly bills rise by 23.4%, starting October 1, 2024. Additionally, an average residential gas bill could increase by $41.72 per year.

Utility Challenges

Public concern has heightened over the state’s energy rates, which are leading to calls for legislative action. Community aggregation programs are available in select municipalities, allowing residents to opt-out of Rhode Island Energy’s rates in favor of potentially lower rates through bulk buying power.

Recent data indicates that January’s total heating degree days in the Providence area reached 1,134, which is higher than the previous two years and exceeds the mean of the last 25 years. This suggests a greater demand for heating, further complicating budgetary considerations for residents.

Conclusion

As Rhode Island navigates these financial and utility-related challenges, the state’s gas prices remain steady, even as tax rates rise. The future impacts of these developments on residents and local economies remain to be seen as budget considerations unfold.