Fleet Management

Why Diesel Fuel Prices Need Increased Taxes

November 2010, TruckingInfo.com - Feature

by Glen Sokolis, Sokolis Group

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Please wait a second before being upset at this headline.
Before this article goes any further, politics don't sway my view on higher taxes, which will increase diesel fuel prices and gas prices -- but common sense might.

What can you buy today for the same price as you did in 1993? If you answered federal tax on diesel and gas, you are 100 percent correct. Since the tax on diesel fuel prices was 24.4 cents in 1993 and gas tax was18.4 cents, if they were adjusted for inflation they should be 43 cents on diesel fuel and 36 on gas. If those taxes had been collecting over the last 17 years, would our highway system be better?

But it didn't happen, so let's look ahead.

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For a fuel management company that works hard to save fleet companies 5- 25 cents on diesel fuel prices, how could we even think of wanting fueling cost to go higher?

Are the roads, highways and bridge infrastructure system better today than in 1993? Were they good in 1993?

Raise the federal fuel tax rates for diesel fuel and gas to the same level. Let's say to 50 cents a gallon on both gas prices and diesel fuel prices. Yes, that means gas prices are going to go up more than diesel fuel prices. Let's do a nickel increase now on fueling. Let's raise it another 10 cents in six months. And within the next 24 months we get to the 50 cent federal tax per gallon for both gas and diesel fuel prices per gallon. Then every year on Jan. 1 we raise the tax by the rate of inflation rounded to the nearest cent. This would help simplify our fuel tax system on diesel fuel prices and gas prices.

On the surface this might not help fleet fueling for fleet companies or the general public, but let's look at the positives:

* Better infrastructure means less traffic congestion, less fleet companies driver delays, improved production

* Improved roads mean less damage to vehicles, tires, suspension and damage to goods being shipped

* Safer, better roads and bridges (difficult to put a price tag on that)

* More jobs. It doesn't take an economic genius to realize more construction means more construction jobs, driver jobs, electrician, steelworkers, uniform companies, technology jobs, etc.

Yes, gas prices would be higher, diesel fuel prices would be higher, but they should have been all along. We have all not really been paying our fair share on these fueling taxes. As hybrid and electric vehicles become more popular some creative way is going to need to be developed to tax those vehicles. Yes, those vehicles use less or no fuel but they still put wear and tear on the infrastructure, right?

Again, let's be clear, this fuel management, fuel consulting person is just stating a view. No politics, no left or right nor do we want our clients to pay higher diesel fuel prices on their fuel cards, mobile fueling or fleet cards. We want economic growth, good roads, bridges and infrastructure we can build off of for the future. Just an open view that you can't expect what you received almost 20 years ago for the same cost today.

Glen Sokolis is president of Sokolis Group, a nationwide fuel management and fuel consulting company, www.FuelManagementSokolisGroup.com. You can reach him at gsokolis@sokolisgroup.com or (267) 482-6160.


Recent installments of "Friday Fuel:"

* "Diesel Fuel Prices Going Up, Fuel Management Needed If You Want Fuel Savings">, 11/19/2010

* "Bad Fleet Fuel Auditing," 11/5/2010

* "Fleet Management and Fuel Savings," 10/1/2010.

* Are Fuel Storage Tanks The Right Choice for Your Fleet?" 9/17/2010.

* "Are You Comparing Apples to Apples on Fuel Prices?" 9/10/2010.

* "Fuel Management and Seven Tips for Putting Together an Effective Fleet Fueling Program," 9-3-2010.



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