Correction: Oil company tax to raise state gas prices - abc27 WHTM

Correction: Oil company tax to raise state gas prices

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The following article corrects a previous ABC 27 report that stated gas prices could increase as the result of a tax hike that went into effect Wednesday.

The fuel tax did not change Wednesday as reported by ABC 27 News.

PennDOT spokesman Rich Kirkpatrick said under Act 89, the state's new transportation plan, the cap on the wholesale price of fuel used to calculate the Oil Company Franchise Tax is gradually being lifted over the next five years.

The cap of $1.25 a gallon, created when the tax was imposed in 1981, changed to $1.87 in January 2014 and will change to $2.49 in January 2015, Kirkpatrick said.

The tax is imposed on oil companies at the wholesale level, so they decide what gets passed on to consumers.

PennDOT has estimated that the average driver in year five of the plan will pay about $2.50 cents more a week.

The state will use the revenue generated by Act 89 for road and bridge projects, including the expansion of Interstate 83 in the Harrisburg area from four to six lanes.

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