Why Natural Gas-Run Vehicles Pay Gasoline Taxes

Scott Detrow / StateImpact Pennsylvania

A Pittsburgh natural gas fueling station

The natural gas industry – with some financial help from the Corbett Administration – is making a big push to increase the amount of natural gas-fueled vehicles on Pennsylvania’s roadways.

Still, experts expect more natural gas-fueled vehicles to hit the roadways in the coming years. With that in mind, a reader asked the Allentown Morning Call whether these cars and trucks – which don’t run on gasoline – pay gas taxes. The answer? They do.

Those who drive compressed natural gas, or CNG, vehicles pay the same highway tax on the fuel they burn as us gasoline-burning warriors, according to industry officials. The rate is derived using a formula that equates the energy value of natural gas with that of gasoline.

 Measured in BTUs, a gallon of gas equates to 5.66 pounds of CNG, said Richard Kolodziej, president of the advocacy group Natural Gas Vehicles for America. For a sense of how much CNG that represents, standard barbecue grills use 20-pound tanks.

Pennsylvania maps a similar course, applying an energy-equivalency formula, and the state charges a total of 31.2 cents per gallon for gasoline — the sum of the “straight” 12-cent “liquid fuels” tax and the oil-company franchise tax of 19.2 cents per gallon.

StateImpact Pennsylvania compared the commonwealth’s gasoline taxes to other states’ earlier this year:

Penn­syl­va­nia levies a 32.3 cent state tax, on top of the 18.4 cent fed­eral rate. That’s good for the fifteenth-highest rate in the county.  Of the six states that bor­der Penn­syl­va­nia, only New York (49 cents) and West Vir­ginia (33.4 cents) have higher rates.

Pennsylvania’s east­ern neigh­bor, New Jer­sey, boasts the 48^th–low­est gas tax in the coun­try. Only Alaska and Wyoming charge lower per-gallon rates than New Jersey’s 14.5 cents.