TORONTO, Ont. – With crude oil prices hovering at a 10-year high, the Ontario Trucking Association has sent a formal request to the provincial government asking Premier Mike Harris to revisit the issue of fuel tax reductions.

Obviously, fuel is a major concern for trucking firms, representing some 30 per cent of operating costs. The OTA points out that the Ontario fuel tax currently accouts for 40 per cent of the per litre price of diesel fuel. The provincial government has stated that lowering fuel taxes will not necessarily result in lower prices for consumers, but the OTA claims there are several examples of government initiatives in the United States that have had a positive impact on fuel prices.

Just this past June, Illinois enacted a temporary six-month suspension of its five percent portion of the 6.25 per cent state sales tax on fuel. The remaining 1.25 per cent goes to local governments. A strict monitoring system was put in place to ensure the savings were passed on by retailers. So far, the program is having the desired effect on the cost of fuel, and the state legislature is now debating whether or not to make the suspension of the tax permanent.

Connecticut introduced a 22 per cent cut in gas taxes earlier this year. That state threatened retailers with fines and/or prison terms if the savings were not passed on to consumers and all price increases must be accounted for. n