The federal gas tax increase of 4.3 cents a gallon went into effect yesterday, and all Rose McHoul had to do in the morning was look up and down the street to make her decision: She raised prices at her South Baltimore service station by a nickel a gallon.
You can't charge three-tenths of a cent, after all. Only nine-tenths.
"There's really nothing to do about it, you have to pass it on," said Ms. McHoul, who owns the Shell station on Russell Street, just north of the entrance to Interstate 95.
"I'm all for it if it's going to reduce the budget deficit," she added. "But it's really not going to do much."
Nationwide, President Clinton expects the tax increase to raise $22 billion in the next five years, all aimed at reducing the deficit.
Across the street from Ms. McHoul at the Amoco station, the prices were a penny a gallon higher than at the Shell station. Unlike Shell, Amoco charges even more for those who pay with a credit card. And at the Texaco next door to Ms. McHoul's establishment, prices were 2 to 4 cents higher a gallon than the day before, depending on the grade of fuel, but ended up a penny less than at the Shell. Texaco also charges a higher price for credit card purchases.
"Yesterday we had brisk business. Maybe they were getting ready for the tax," said Texaco station owner Akram Bhatti. "The customers hate it," he added.
Still, Wayne Chambers was actually in favor of the increase. "It should've been done three years ago," said Mr. Chambers, who works with the Marine Corps Security Forces in Chesapeake, Va. He spends weekends at home in Baltimore with his parents.
Mr. Chambers stood in stark contrast to the majority of American drivers, according to the Automobile Association of America. Last December its survey showed 70 percent of motorists didn't like the idea of a gas tax increase intended to reduce the deficit.
With the new federal tax, now a total of 18.4 cents a gallon, Maryland drivers pay 41.9 cents in state and federal taxes for each gallon of gas, at an average $1.08 per gallon of regular unleaded.