Connecticut governor signs bill for cash discounts on fuel, delayed tax hike

| 6/20/2008

Connecticut Gov. M. Jodi Rell put her signature on a bill Tuesday, June 17, to offer consumers a break from high fuel prices.

The new law, previously SB1000, stops a scheduled fuel tax hike. It also allows more fuel stations to offer cash discounts.

“Finally, the consumers of Connecticut are getting a bit of a break from the bruising price of (fuel)!” Rell said in a written statement. The new rules took effect immediately.

More fuel stations throughout the state now are allowed to offer cash discounts. The discount overrides franchise agreements between oil companies and fuel stations, thus allowing retailers to offer discounts to customers who pay cash to fill up.

About 85 percent of the state’s approximately 1,000 fuel stations are affected by such agreements, The Hartford Courant reported.

Advocates for the change say the discounts could save consumers between 10 cents and 20 cents per gallon in a state where a gallon of diesel is averaging $4.90.

Connecticut Attorney General Richard Blumenthal gave the all-clear earlier this month for lawmakers to adopt the change. At the request of the governor, he released a legal opinion on the topic, and there’s no federal law that would prevent the state from approving the cash discounts.

Discontent expressed by consumers led lawmakers to scrap the scheduled July 1 increase in the state’s tax on wholesale earnings from fuel sales. The tax was slated to increase from 7 percent to 7.5 percent.

The tax increase was expected to raise $25 million in revenue for transportation projects in the state while adding 7.7 cents per gallon to the price of diesel at the pump. Gas would have increased up to 5 cents per gallon.

The state’s per-gallon taxes would not have been affected.

The next scheduled increase in the gross earnings tax is July 1, 2013. The tax rate is set to be raised to 8.1 percent.

Rell said the new law will be beneficial to consumers but still more needs to be done.

“This bill is a good start on helping our hard-pressed consumers, but it is only a start. We know we cannot rest easy,” she said.

To view other legislative activities of interest for Connecticut in 2008, click here.

– By Keith Goble, state legislative editor