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Change In Gas Tax Could See Maryland Motorists Heading To Virginia To Fill Up

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How far would you drive for cheaper gas? For some Maryland drivers, it won't be far—Virginia will soon scrap its gas tax, while Maryland is increasing its tax.
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How far would you drive for cheaper gas? For some Maryland drivers, it won't be far—Virginia will soon scrap its gas tax, while Maryland is increasing its tax.

How far would you drive for cheaper gas? Come July commuters in Maryland may not have to drive very far at all, just a few miles over the border to Virginia.

As both states prepare to enact new gasoline tax policies, service stations in Maryland say a growing gap between pump prices will jeopardize their survival in an industry where profit margins are tight already.

Starting July 1 Virginia's 17.5 cents-per-gallon gas tax will be replaced with a smaller tax on the wholesale price of gasoline, causing a drop of about six cents in the price you pay at the pump. But in Maryland the first of three gas tax increases will take effect, pushing the state's fuel tax to 27.5 cents-per-gallon. The average price for a gallon of regular in Virginia ($3.39) is currently thirteen cents less than in Maryland ($3.52), according to AAA Mid-Atlantic. 

In the border war over gasoline it appears Maryland stations will be at a big disadvantage.

"For the members along the border it's going to be a cat fight just to stay in business. It will put some of them out of business," said Kirk McCauley, the head of government relations at the WMDA Service Station and Automotive Repair Association, a group that represents gas stations in Washington, Maryland and Delaware.

Stations prepare to take a hit

At the National Harbor Sunoco, where regular unleaded is going for $3.67, customers can see the Wilson Bridge stretching across the Potomac into the commonwealth. But will they make the trip for cheaper gas?

"No, I will not. I want what is convenient for me," said Denise Brown of Oxon Hill as she filled up her Mercedes on Tuesday.

About 77,000 Virginians drive into Maryland for work every day.  Maryland service stations say if they lose just a fraction of their customers they may not survive.

"They can cross the river and go over the bridge and save, once this thing in is full force, 36 to 48 cents per gallon difference, just in taxes," said Fazal Sirhandi, the Sunoco owner who invested $4 million dollars into gas pumps, a convenience store, and car wash that opened last year. 

After the July1 increase, Maryland's gas tax will increase another eight cents by July 2015 and then another eight cents the following year. 

"It will have a huge impact. Consumers drive miles to save five cents per gallon," Sirhandi said. 

One of Sirhandi's customers, filling up his SUV before heading home to Virginia, said once the price changes happen he would probably always get gas on the other side of the Potomac.

"If I can find a better deal I'm going to go for it," the man said.

"I don't think anyone is going to go from Gaithersburg to Virginia to buy gas, but if you are in the District of Columbia or Maryland and there is a bridge right there, you will roll over the bridge and buy your gas," said McCauley, who said individual gas station owners have little flexibility to change their prices to stay competitive.

Virginia gas stations ready for a windfall?

A few miles across the Wilson Bridge at one of the closest gas stations to the border, Sur Chase, who owns a Liberty gas station selling regular unleaded for $3.59, was not convinced he's about to see long lines of customers escaping Maryland's higher prices.

"I've been told that my sales will go up, but I don't see it's going to happen," Chase said. He doubts the prices will vary so dramatically that motorists will sacrifice convenience to seek out the lower price.

"Why do I want to come this side for twenty cents less when it costs me twenty cents to burn my gas," he wondered.

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