Consumers can afford a 10-cent gas tax increase, but many businesses can't

March 17, 2011

I would like to offer a response to Thomas Coburn's "The real economics of the gas tax" (March 7). While Mr. Coburn is correct that 10 cents per gallon is a small increase to the average consumer, it is a very large increase to commercial end-users and resellers.

For example, Company A of Dundalk uses 22,500 gallons of diesel fuel per week hauling shipping containers out of the Dundalk Marine Terminal. A 10-cent per gallon tax hike for them equates to an instant $2,250 per week or $117,000 per year increase in operating expenses.

Another over-the-road trucking corporation, Company B of Elkridge, uses 45,000 gallons of diesel per week. That is an astounding $234,000 in additional taxes each year. Similar stories abound for Company C that is hauling earth for the Inter-County Connector project, Company D providing concrete for a new school, and Company E that operates school buses.

Increasing taxes is also a financing concern for resellers such as gas stations. A full tractor-trailer load of gasoline is 8,500 gallons. An additional 10 cents per gallon adds $850 to the price of the fuel. A gasoline retailer pays that up front to their supplier but collects it one dime at a time from the consumer. If I supply five stations with gas each day I suddenly need an extra $4,250 per day just to operate.

As a consumer I would agree that an additional 10 cents per gallon is not going to bring me to financial ruin. However, as a fuel broker I object heartily on behalf of the many Maryland customers that will experience this exponentially. For many companies it may mean the difference between operating on a slim margin and mass layoffs.

Misty Sexton, Columbia

The writer is a fuel broker for Space Petroleum.

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