Congress to consider upping federal fuel tax

December 13, 2010

WASHINGTON — Truckers won’t be happy when the new Congress, with John Mica (R-Fla.) chairing the House Transportation & Infrastructure Committee, looks at raising the federal motor fuels tax.

Mica told the Florida Times-Union that he supports raising the federal tax on gasoline and diesel fuel by 15 cents per gallon — from the current 18.4 cents per gallon to 33.4 cents. States also impose a tax on motor fuels.

Any increase in the motor fuels tax makes rail intermodal (trailers and containers atop flat cars) more competitive as railroads are significantly more fuel efficient than truck transportation. And as railroads buy fuel in bulk quantities and store their diesel fuel — plus buy forward contracts locking in future prices — they realize additional savings over most truckers.

A BNSF official told the Journal of Commerce that while BNSF and Union Pacific are moving 4 million intermodal loads annually, there remain up to 7 million truck movements for which the two railroads are competing. During this recession, intermodal has been the only line of rail traffic that has grown, BNSF told the Journal of Commerce.

The federal motor fuels tax is the primary source of funding for constructing and reconstructing federal-aid highways, including the Interstate highway system — but it has fallen short in recent years.

In 2011, Congress — beginning with the T&I Committee — will reauthorize the HIghway Trust Fund, which includes setting the motor fuels tax rate.

Also to be considered will be a proposal to establish a percentage tax — rather than a specific cents-per-gallon tax — that would generate more revenue as the pump price of motor fuel increases.

According to Dow-Jones newswire, some state departments of transportation are pushing for an 8.4 percent tax on gasoline and a 10.6 percent tax on diesel. Mica told Dow-Jones he is opposed to percentage taxes.