Ameer Randolph
Texans use about 13 billion gallons of gasoline and 4.5 billion gallons of diesel fuel each year, in addition to smaller amounts of alternative fuels such as natural gas, and electricity. Texas' fuel taxes are the lowest among the 10 largest states, with Texans paying 38.4 cents in taxes for every gallon of gasoline and 44.4 cents per gallon for diesel. With that in mind, which type of fuel is the best option for Texans?
Which car fuel is best in Texas?
| Characteristics | Values |
|---|---|
| Average Gas Price | $2.835 |
| Motor Fuel Taxes | 20 cents per gallon since 1991 |
| Motor Fuel Excise Tax | 38.4 cents per gallon |
| Diesel Fuel Excise Tax | 44.4 cents per gallon |
| Alternative Fuels | Compressed and liquefied natural gas, electric vehicles, hydrogen fuel cell electric vehicles |
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What You'll Learn
Electric vehicles and charging infrastructure
Electric vehicles are becoming an increasingly popular option for car owners in Texas, and the state is taking steps to support this growing trend. The Texas Electric Vehicle Infrastructure Plan, submitted by the Texas Department of Transportation (TxDOT), aims to ensure that all Texans have access to EV infrastructure, with a particular focus on rural areas. This plan is supported by Governor Greg Abbott, who has requested that TxDOT takes the lead in developing the necessary infrastructure.
The National Electric Vehicle Infrastructure Formula Program (NEVI) will provide significant funding to help make this a reality. For the fiscal years 2022-2026, Texas will receive $407.8 million to deploy electric vehicle charging infrastructure along its public roads. This funding will enable the state to establish an interconnected network of charging stations, making it more convenient for EV owners to travel throughout Texas.
TxDOT has also developed several resources to support EV drivers in Texas. These include an interactive map where users can suggest charging station locations, an EV charging survey to gather feedback, and a statewide planning map that displays alternative fuel corridors, study areas, and existing charging stations. Additionally, TxDOT provides tips for EV drivers on how, when, and where to charge their vehicles.
As Texas continues to invest in and develop its EV infrastructure, it will become even more attractive for Texans to make the switch to electric vehicles. This will not only reduce the state's carbon footprint but also provide a more cost-effective and environmentally friendly transportation option for its residents.
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Hydrogen fuel cell electric vehicles
Texas has several laws and incentives in place to promote the adoption of hydrogen fuel cell electric vehicles (FCEVs). The state recognises the importance of advancing clean transportation and has established various programs and grants to support the development of FCEV technology and infrastructure.
The Texas Department of Transportation (TxDOT) plays a crucial role in this regard. TxDOT is authorised to seek funding from public and private sources to acquire and operate hydrogen vehicles and establish publicly accessible hydrogen fuelling stations. This ensures that FCEV owners have convenient access to refuelling options. TxDOT is also responsible for monitoring and reporting emissions data from these vehicles and fuelling stations to the Texas Commission on Environmental Quality (TCEQ).
The TCEQ is a key organisation in Texas's efforts to promote FCEVs. It administers several grant programs aimed at reducing emissions and encouraging the adoption of alternative fuels. The Governmental Alternative Fuel Fleet Grant Program (GAFF), for instance, provides grants for the purchase or lease of new vehicles powered by eligible alternative fuels, including hydrogen. The Texas Hydrogen Infrastructure, Vehicle, and Equipment (THIVE) program is another initiative managed by TCEQ, offering grants to individuals, state and local governments, and private entities for the repower or replacement of eligible vehicles with FCEVs.
In addition to these initiatives, Texas also offers incentives for FCEVs through programs like the Texas Clean Fleet Program (TCFP). This program provides grants to fleets looking to transition to alternative fuel vehicles (AFVs) or hybrid electric vehicles (HEVs). The ERIG program is yet another example of Texas's commitment to improving air quality, offering grants for clean air projects, including those involving alternative fuel dispensing infrastructure and alternative fuel use.
Overall, Texas has implemented a range of laws, incentives, and grants to encourage the adoption of hydrogen fuel cell electric vehicles. These initiatives aim to reduce emissions, improve air quality, and establish the necessary infrastructure to support the growing FCEV market.
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Compressed natural gas
The Texas A&M Transportation Institute (TTI) has also been involved in studying the feasibility of converting bus fleets to CNG. TTI researchers have worked with transit agencies to examine alternative fuels, perform life-cycle cost (LCC) analyses, and assess the financial risks of converting to CNG. They found that the return on investment for converting to CNG depends largely on fleet size. For a 100-bus fleet, the savings over a 12-year period ranged from $8 to $23 million, even when considering the cost of building a refueling station.
According to TTI Associate Research Scientist John Overman, sponsors are interested in understanding when it is economically beneficial to convert to CNG and how to go about the process. While modern CNG vehicles are similar to diesel vehicles in terms of operations, emissions, and reliability, determining whether the conversion is worth the initial investment can be challenging. However, the stable price and supply of natural gas, as well as the maturity of the vehicle technology, make CNG an attractive option for transit agencies with large fuel budgets.
In summary, compressed natural gas is a viable alternative fuel for transit agencies in Texas, particularly those with larger fleets, due to its cost-effectiveness and stable supply. The success of the DART CNG fleet transition and the positive findings from the TTI research have prompted other transit agencies, such as Houston METRO and Capital Metro in Austin, to consider adopting CNG for their bus fleets.
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Motor fuel taxes
Texas has a long history of motor fuel taxes, with the state enacting its tax on gasoline as early as 1923, at one cent per gallon. Over time, the Legislature has adjusted the tax rates, and as of 2016, the state gasoline and diesel taxes were 50.3 cents for gasoline and 64.0 cents for diesel. Texas law provides various exemptions and refunds for certain types of gasoline usage, such as for federal agencies, Texas public school districts, and "off-road" gasoline use in motorboats, lawnmowers, and agricultural equipment. Additionally, Texas does not add extra taxes, fees, or charges on top of the main tax, keeping the final price of fuel at the pump more predictable for consumers.
Under the Texas Constitution, three-quarters of the state's motor fuel tax revenue is dedicated to building and maintaining public roadways, with the remaining quarter going towards the state's Available School Fund to support public education. This allocation reflects the historical need for better roads as the number of vehicles increased in the early 20th century.
Texas adopted separate tax rates for the three primary types of motor fuel: gasoline, diesel fuel, and liquefied gases. The initial diesel rate was set higher than that of liquefied gases, at 8 cents per gallon compared to 4 cents for liquefied gases. Gasoline was taxed at the same rate as liquefied gases, 4 cents per gallon. These rates have been adjusted over time, with the most recent changes taking effect in 2017.
Motor fuel is taxed as it is withdrawn from a storage facility or "terminal rack," which is typically its first stop after leaving the refinery. This taxation structure is consistent across different types of fuel, including Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) diesel fuel. Texas also has specific regulations regarding the taxation of diesel fuel, with the use of red dye to distinguish between taxable and non-taxable diesel for on-road and off-road use, respectively.
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Gas prices
Texas is a big state, and its residents use about 13 billion gallons of gasoline and 4.5 billion gallons of diesel fuel each year. Texans pay 38.4 cents in taxes for every gallon of gasoline they buy and 44.4 cents per gallon for diesel. This is because Texas taxes motor fuel as it is withdrawn from a storage facility, usually its first stop after leaving the refinery. The current average gas price in Texas is $2.835.
Texas' tax rates on gasoline and diesel have been stable in recent years, remaining at 20 cents per gallon since 1991. However, in the late 1980s, an economically turbulent period in Texas due to an oil bust, gas tax rates rose sharply, from 5 cents per gallon in 1984 to 20 cents in 1991. Diesel rates more than tripled during this period, increasing from 6.5 cents to 20 cents per gallon.
Texas' motor fuel taxes generated more than $3.4 billion in fiscal 2015, making them the fourth-largest source of state tax revenue. Nearly all states, including Texas, use the bulk of this revenue for transportation projects. Under the Texas Constitution, three-quarters of the state's motor fuels tax revenue is used to build and maintain public roadways, with the remainder going to the state's Available School Fund, which supports public education.
While Texans rely heavily on gasoline and diesel fuel, there are also efforts to promote alternative fuels and advanced vehicles. Texas has five coalitions as part of the Clean Cities and Communities program, a US Department of Energy partnership to advance clean transportation nationwide. Additionally, Texas offers grants for Hydrogen Fuel Cell Electric Vehicles (FCEV) and infrastructure and has regulations in place for Electric Vehicle (EV) charger inspections.
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Frequently asked questions
The most common types of car fuel in Texas are gasoline and diesel. Texans use about 13 billion gallons of gasoline and 4.5 billion gallons of diesel fuel each year.
Some alternative car fuels in Texas include compressed and liquefied natural gas, as well as electricity for electric vehicles (EVs).
In Texas, motor fuel is taxed as it is withdrawn from a storage facility or "terminal rack", which is usually its first stop after leaving the refinery. Texans pay 38.4 cents in taxes for every gallon of gasoline and 44.4 cents per gallon for diesel, including federal taxes.
Three-quarters of Texas' motor fuel tax revenue is used to build and maintain public roadways, with the remaining quarter going towards the state's Available School Fund, which supports public education.
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