Georgia Governor Brian Kemp has declared a state of emergency and issued an executive order to suspend the collection of the state motor fuel tax from 12:01 AM on September 29 to 11:59 PM on October 29.

The executive order suspends the consumption tax under Georgia Code § 48-9-3, which is 33.3 cents per gallon for gasoline and 37.3 cents per gallon for diesel, also covering taxable fuels such as aviation gasoline, liquefied propane, ethanol gasoline, liquefied natural gas, and compressed natural gas. It also suspends the tax under § 48-8-30 for carriers regulated by the U.S. Surface Transportation Board that use fuel specifically for motor vehicles. The tax is collected at the wholesale distribution stage and passed on to retail prices, so gas stations will reflect the tax relief in their prices only after new supplies arrive. The Governor's office reports the statewide average price for regular gasoline is $4.19 per gallon and $6.24 per gallon for diesel, while the national average for regular gasoline is about $4.48 per gallon.

The same executive order also suspends state-level axle weight limits for commercial trucks and initiates a price gouging ban during the state of emergency, covering gasoline, diesel, and goods and services necessary to respond to the emergency. Agriculture Commissioner Tyler Harper stated that diesel prices have more than doubled recently, coinciding with the peak season for agricultural fuel use. House Speaker Jon Burns and Lieutenant Governor Burt Jones expressed their support. Fuel tax revenues in August were slightly below $193 million, earmarked for road and bridge maintenance, and this suspension is expected to result in a monthly loss of about $200 million, with the state government planning to use surplus funds to fill the road funding gap.

This is the second time this year that fuel taxes have been suspended. In March, the legislature passed a bill signed by Kemp to suspend the tax for 60 days; in May, it was extended using emergency powers until around Memorial Day, and it was briefly reinstated in early June. At that time, officials estimated the 60-day suspension would save about $360 million to $400 million. This latest suspension is attributed to global market fluctuations and disruptions in oil supply, with media reports linking rising prices to energy disruptions caused by conflicts involving Iran.

For a 15-gallon tank, the suspension of the gasoline tax means a savings of about $5 when full, with a larger reduction for diesel. Since the tax is accounted for at the distribution stage, the implementation starting Tuesday does not mean that retail prices will immediately drop by the same amount. State revenue from the fuel tax will shift to general surplus, with road maintenance funds covered by reserves, allowing drivers and freight carriers to benefit from price differences within the 30-day window, while fuel retailers bear the risks of price adjustment delays and price gouging enforcement.

In market terms, buyers include households, farms, and truck transport, while sellers are gas stations and wholesale distributors. This is a fiscally driven benefit event, not an increase in production. Funds are flowing from the state road tax to the fuel consumption end, benefiting agriculture and freight with high diesel exposure, while putting pressure on road maintenance budgets that rely on fuel taxes. State fuel prices remain below the national average for gasoline, but the $6.24 diesel price significantly raises logistics costs, and the tax relief only covers the state tax portion, with federal taxes and refinery crack spreads still in effect.

Source: Public Information