Rajan Wilcox
Diesel fuel prices in Pennsylvania have been a cause for concern among residents, with prices reaching $6.33 per gallon in May 2022, significantly higher than in other states. The high prices have been attributed to various factors, including the state's gas tax rate, which is higher than the national average, transportation system deficits, and the cost of maintaining roads and bridges. The state's diesel prices are also influenced by the PA Turnpike toll road, which is the most expensive per mile in the country. With these factors at play, diesel fuel in Pennsylvania has become notably expensive compared to other regions.
| Characteristics | Values |
|---|---|
| Gasoline tax rate | 62.2 cents per gallon |
| Gasoline tax compared to national average | Higher than the national average of 36.8 cents per gallon |
| Gasoline tax compared to other states | Highest in the country |
| Diesel tax compared to other states | Highest in the country |
| Turnpike toll road cost | Most expensive per mile in the country |
| Gas price in Western PA near the Ohio border | $3.80 per gallon |
| Gas price in Pittsburgh | $3.60 |
| Gas price in Erie County in June 2022 | $5.035 per gallon |
| Diesel price in Erie County in June 2022 | $6.138 |
| Gas price in Potter County | $3.588 per gallon |
| Gas price in Union County | $3.120 |
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What You'll Learn
High state-imposed diesel tax
Pennsylvania has some of the highest fuel prices in the United States. The state's gas tax rate is 62.2 cents per gallon, which is higher than the national average of 36.8 cents per gallon.
The high cost of diesel fuel in Pennsylvania can be attributed to the state's high diesel tax. In fact, Pennsylvania has the highest state-imposed gasoline and diesel tax per gallon in the country. The state's diesel tax rate is higher than that of California, which has the highest gasoline tax rate in the US at 77.9 cents per gallon.
The impact of the high diesel tax in Pennsylvania is significant, with diesel prices in the state being notably higher than in other parts of the country. For example, in Western Pennsylvania near the Ohio border, diesel prices have been reported to be around $3.80 per gallon, while in California, diesel prices were reported to be lower at $0.579 per gallon, although this was expected to increase to $0.596 per gallon in July.
The high diesel tax in Pennsylvania has been a source of frustration for residents, with some expressing their concerns about the impact on their finances and the discrepancy with neighbouring states. The state's high fuel taxes have also been linked to the need to address a $3 billion deficit in Pennsylvania's transportation system, caused by gas taxes not keeping up with inflation.
While the high diesel tax contributes to higher fuel prices in Pennsylvania, it is important to note that fuel companies ultimately determine how much of the tax increase is passed on to consumers. Other factors, such as market conditions and supply and demand, can also influence fuel prices in the state.
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Fuel companies passing tax hikes to consumers
While there is a lack of specific information on why diesel fuel is expensive in Pennsylvania, one of the contributing factors could be the state's high fuel taxes. In a discussion on Reddit, some users attribute the high fuel prices in Pennsylvania to the state's high fuel taxes, claiming that it has the highest state-imposed gasoline tax per gallon in the country, which also applies to diesel fuel.
Fuel companies typically pass tax hikes on to consumers, and this can be observed in various states and regions. For instance, in California, Senate Bill 2, which aimed to halt proposed changes to the state's Low Carbon Fuel Standard (LCFS), was rejected by the California Senate, resulting in an increase in gas prices. A report by the University of Pennsylvania's Kleinman Center for Energy Policy predicted that these changes could increase gas prices by 65 cents a gallon in the short term and by 85 cents by 2030. CARB spokesperson David Clergen acknowledged that oil companies decide how much of the additional cost, if any, to pass on to consumers.
In another example, fuel groups in the United States, including those representing fuel retailers and truck stops, warned of price hikes if Congress did not extend certain tax credits, such as the $1 biodiesel tax incentive. They argued that the expiration of these credits would lead to rising energy and fuel prices, impacting both consumers and industries.
Economists generally agree that, in the short term, companies will likely pass on the cost of a tax hike to consumers, resulting in higher prices. This is particularly true in markets with inflexible demand, where consumers have limited alternatives. However, over time, polluting companies will face pressure from customers to eliminate the extra cost of their CO2 emissions. Companies offering lower-carbon products will be able to charge less, attracting customers away from their polluting competitors. This dynamic creates economic incentives for firms to reduce carbon emissions and embrace clean energy sources.
To mitigate the impact of tax hikes on consumers, some jurisdictions have implemented strategies such as returning the tax revenue to consumers through dividends. This approach, piloted in British Columbia, provides consumers with money to offset the increased cost of electricity or gasoline due to the tax. It also incentivizes individuals to avoid buying CO2-emitting products, as they can retain a larger portion of their dividend by choosing more efficient alternatives.
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Gas taxes not keeping up with inflation
Gas taxes in Pennsylvania have not kept up with inflation, leading to a $3 billion deficit in the state's transportation system. The state's gas tax rate is 62.2 cents per gallon, higher than the national average of 36.8 cents but lower than California's 77.9 cents. However, the relatively high gas tax in Pennsylvania has not been increased in line with inflation, and this has contributed to the state's financial challenges in maintaining its transportation infrastructure.
The impact of this deficit is felt by residents and visitors to Pennsylvania through the high cost of fuel in the state. Gas prices in Pennsylvania are among the highest in the nation, with prices spiking to nearly $3.72 a gallon in Western Pennsylvania in 2021 and reaching a record high of $5.035 per gallon in Erie County in June 2022. The diesel fuel price was even higher, at $6.138 per gallon during the same period.
The high gas prices in Pennsylvania are a result of a combination of factors, including the state's gas tax rate and the cost of fuel. In addition, the Pennsylvania Turnpike, a toll road, is the most expensive per mile in the country, further contributing to the high cost of transportation in the state. The state's fuel companies determine how much of the tax increase to pass on to consumers, and this has led to fluctuations in gas prices over time.
While the state's transportation plan aims to address the deficit and improve roads and bridges, it has been a long-standing issue that is challenging to resolve. The plan includes eliminating a cap on the Oil Company Franchise Tax, which will now extend to the full wholesale price, resulting in a 10-cent per gallon tax hike in January 2021. However, the impact of this change on fuel prices is yet to be fully realized.
The high gas prices in Pennsylvania have sparked comparisons with other states, such as South Carolina, which has lower gas prices but additional fees like a penny sales tax for roads in York County. Despite the challenges, the state is working towards stabilizing its transportation system and addressing the impact of inflation on gas taxes.
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Pennsylvania's high transportation deficit
The issue of high transportation costs in Pennsylvania has been a long-standing one, with fuel companies determining how much of the tax increase to pass on to consumers. This has resulted in a 10-cent per gallon tax hike in January 2021, contributing to the high cost of living in the state. The new transportation plan aims to address this issue by eliminating the cap on the Oil Company Franchise Tax and extending it to the full wholesale price. This is expected to help deal with crumbling roads and bridges, stabilizing the transportation system.
However, the high transportation deficit and subsequent high fuel prices have been a source of frustration for many residents and travellers in Pennsylvania. Some have noted the difference in fuel prices between Pennsylvania and neighbouring states, with gas prices in Western Pennsylvania near the Ohio border being significantly higher. This has led to concerns about the impact on commuters and the competitiveness of the state.
The high transportation deficit in Pennsylvania has also highlighted the political nature of gas taxes, with concerns that raising taxes could lead to a loss of votes. Additionally, the state's high fuel prices have brought attention to the condition of roads and the allocation of tax revenue, with some questioning whether the money is being spent on road improvements as intended.
Overall, Pennsylvania's high transportation deficit has contributed to high fuel prices, particularly for diesel, impacting residents, travellers, and the state's competitiveness. The new transportation plan aims to address the deficit and improve the state's transportation system, but it remains a challenging issue for the state.
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High political visibility
One of the reasons for the high cost of diesel fuel in Pennsylvania is the high political visibility of the state. This means that any changes to fuel taxes are likely to be highly scrutinized and could impact election outcomes. As a result, politicians may be reluctant to raise fuel taxes, even if it is necessary to keep up with inflation and fund improvements to the state's transportation infrastructure.
Indeed, Pennsylvania's gas tax has reportedly not kept up with inflation, leading to a $3 billion deficit in the state's transportation system. This has resulted in crumbling roads and bridges, which the state now hopes to address with a new transportation plan. However, this plan includes removing the cap on the Oil Company Franchise Tax, which will likely result in higher fuel prices for consumers.
The high political visibility of Pennsylvania may also be a factor in the state's relatively high fuel taxes compared to other states. As one commentator noted, "you have to pay for the benefits you want, in essence, there's not a free lunch." In other words, the extensive transportation infrastructure required to connect the state's large population centres comes at a cost, which is reflected in the fuel taxes.
Additionally, the high political visibility of Pennsylvania may contribute to the public's awareness of fuel prices and their sensitivity to price increases. This, in turn, could influence the decisions of politicians regarding fuel taxes, as they weigh the potential benefits of increased taxation against the risk of voter backlash.
It is worth noting that while Pennsylvania's fuel taxes are relatively high, other states such as California and Hawaii have higher gasoline tax rates per gallon. However, the combination of high fuel taxes, the removal of the cap on the Oil Company Franchise Tax, and the need to address the state's transportation deficit has likely contributed to the high cost of diesel fuel in Pennsylvania.
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Frequently asked questions
Diesel fuel is expensive in Pennsylvania due to the state's high fuel tax, which is reportedly higher than the national average. The state's transportation system was in a $3 billion deficit, and fuel companies passed the tax increase to consumers.
The price of diesel fuel in Pennsylvania has historically reached $6.33 per gallon. As of April 2025, the price was $4.01 per gallon.
Pennsylvania has one of the highest average diesel prices in the country. States like Mississippi, Oklahoma, and Texas have cheaper diesel prices.
In addition to the state's fuel tax, other factors include the cost of crude oil, refinery capacity, and distribution and marketing costs.
