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Georgia offers $75 million in gas relief
Governor announces moratorium on state motor fuel tax; expected to save drivers millions.
September 2, 2005: 2:16 PM EDT
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NEW YORK (CNN/Money) - Georgia Governor Sonny Perdue announced Friday a moratorium on the state motor fuel tax through the end of September.

At a news conference, the governor said the relief should translate into tax savings of more than 15 cents a gallon for customers paying $3 a gallon at the pump.

The temporary action is expected to save drivers $75 million, Perdue said. "I believe it is absolutely wrong for the state to reap a tax windfall in this time of urgency and tragedy," he said.

The executive order calls for the temporary moratorium to begin midnight Friday, but the state legislature, which is expected to convene Tuesday, still needs to ratify it.

Georgia's state motor fuel tax consists of a 7-1/2 cents a gallon excise tax as well as a 4 percent sales tax on each dollar spent on gasoline.

The amount consumers pay in sales tax has risen in tandem with spiking gasoline prices.

"I expect this tax moratorium to be passed on to the consumer and Georgia citizens who drive," Perdue said, adding that this was not an opportunity for businesses to gain.

Reports of some stations in the Atlanta area charging as much as $5 a gallon led Perdue to sign an order enacting the state's price-gouging statute Thursday.

The average price for a gallon of regular unleaded in Georgia hit a record $2.89 Friday, according to AAA's daily fuel report. But the motorist organization has said its survey hasn't been able to keep up with real price increases at the pumps.

The governor said the state could afford to give Georgians the emergency tax relief since oil prices, which were already near record highs before Katrina hit, allowed the state to collect more than it had originally budgeted for, the governor said.

Damage caused by Hurricane Katrina has disrupted the distribution of gas supplies, sending consumers fearing a shortage to stations in droves.

But Perdue said the supply situation was encouraging and that while there are still some spot shortages, the situation is correcting itself.


How much is Katrina going to cost the economy? Click here to find out.

Are you getting gouged at the pump? For more, click here.  Top of page

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