Governor’s fuel price work group discusses remedies to inflated prices at the pump
A group of stakeholders has started looking at how to address high gas prices in the state, but the consensus is bringing prices down might not be so easy.
The Wyoming Gas and Diesel Price Working Group was assembled this summer by Wyoming Governor Mark Gordon in an attempt to lower gas prices for consumers. After a series of public meetings, the goal is for the group to provide a recommendation to the governor.
The takeaway from the first meeting is that solutions are complicated because fuel prices are largely dependent on a global market, which is in flux because of the pandemic and the war in Ukraine.
State Representative Clark Stith of Rock Springs said finding a solution will be tough.
“We want to change the direction of a wave in the ocean, and we’re sitting in a canoe with our paddles trying to do that,” he said.
One idea discussed was lowering or pausing the state fuel tax, which is at 24 cents per gallon and is charged to the distributor and trickles down to consumers. The Wyoming Department of Transportation (WYDOT) indicated concerns because fuel tax revenue helps fund a lot of road maintenance infrastructure projects around the state.
“So, when you see a snowplow out there, no federal money goes to snowplows, that's all state money,” Luke Reiner, the director of WYDOT, said. “When you see the guys out fixing guardrails, or throwing a patch in a pothole or painting lines that have come off over time, that's all state money. And so the state money goes to the ongoing maintenance of the road. The federal government always helps build or reconstruct our roads – they do not help maintain them.”
Another idea floated was increasing natural gas and oil production in the state. But Petroleum Association of Wyoming’s President Pete Obermueller said that is not so easy, because of the disrupted supply and demand chain.
“All of this sort of should lead us to have a bit of a sense of humility about our ability to do anything at a state policy level, in particular, that will immediately or even in the long term affect prices at the pump,” Obermueller said. “For better or worse, Wyoming is part of a global market, and when those supply shocks happen on the crude side, it ripples down.”
Obermueller said energy demand has returned, and supply is still struggling to return, which simply takes time to balance out. Wyoming currently has 19 drilling rigs, but pre-pandemic Wyoming had an average of 33 drilling rigs in July of 2019.
“As our supply is coming back, but still low, it signals that there is a supply crunch, and that signals to the market that that price should be higher,” Obermueller said. “And fortunately, we can't control that. If we could, we’d either have state or government centrally controlled pricing and production, or we would have just straight up collusion in the market.”
Other ideas included a dynamic state sales tax. Rep. Stith said this would mean the tax would decrease slightly when the price of oil is consistently high. Currently the sales tax is set at four cents.
“If the price of oil stays above a benchmark, say, $85 a barrel or $95 a barrel, for some extended period of time, that the state share of the state four cents sales tax might be reduced by say, half a penny,” Stith said. “And it could act as a shock absorber financially for people. Whether that would have other unintended consequences is again, something to explore.”
Stith also said another option could be a sales tax rebate for the elderly.
Sam Shumway, the Wyoming state director for the American Association of Retired Persons (AARP), said the elderly are especially feeling the effects of high fuel prices.
“Many of our members are on fixed incomes, and struggle paying bills and struggle paying for gas with inflation and increased gas prices,” Shumway said.
More ideas will be fleshed out Friday, July 22 at the second of the two public meetings.