On July 1, the tax will increase by around half a cent per gallon, depending on the blend, according to Illinois authorities. The tax on gasoline will rise to 39.2 cents per gallon and on diesel to 46.7 cents per gallon, in line with amended legislation passed in 2019 that doubled Illinois’ motor fuel tax and made future annual increases automatic by pegging them to consumer price inflation, which has surged in recent months.
According to the American Automobile Association (AAA), the June 25 average national retail price for regular gasoline stood at $3.086 per gallon. California took top spot for the highest prices, at $4.258 per gallon, while Illinois was in tenth spot, at $3.303 per gallon.
Mississippi, at $2.727 per gallon of regular gasoline, was the cheapest, followed by Louisiana at $2.734, and Texas at $2.765.
“Motorists are paying, on average, 37 percent more to fill up than the start of the year,” said Jeanette McGee, AAA spokesperson, in a statement earlier in June. “Prices for the rest of the month are likely to push more expensive, but if crude production increases, as forecasted, there is the possibility of seeing some relief at the pump later this summer.”
Crude prices have been on the rise since dropping precipitously in April 2020, and at around $73.5 per barrel currently, they are now at their highest levels since October 2018 and around $23 per barrel more expensive since January of this year.
Inflation, meanwhile, rose again in May, with the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index hitting its highest annual rate since 2008, Friday’s Commerce Department figures show.
Over the past 12 months in May, consumer prices shot up 3.9 percent, reflecting the biggest gain since 2008 when oil prices hit a record high of $150 a barrel.
A separate measure of inflation that strips out the volatile categories food and energy, called core PCE, climbed by 3.4 percent over the year to its highest annual level since 1992.
The Federal Reserve sees the PCE inflation measure rising at an annual rate of 3.4 percent in 2021, well above its goal of 2 percent, before receding to 2.1 percent in 2022.
While Federal Reserve officials maintain that inflation will be transitory, the Federal Open Market Committee (FOMC) revised its projections for rate hikes at their recent policy meeting, forecasting two interest rate increases by the end of 2023, bringing them forward from 2024.
Inflation has surged to the forefront of investor concerns, replacing worries over slow growth and high unemployment.