DAILY ENERGY REPORT
Oil prices, Saudi and Algerian reaction to NOPEC bill, fuel taxes and electric vehicles, Russia, India, the UK, and more
CHART OF THE DAY
Total State and Local Motor Fuel Tax Revenues ($Billions)
Source: US Census Bureau and EOA, 2023. Data for 2021 and 2022 are EOA’s estimates
Figure (1) above shows the total revenues collected by states and local governments in the US from taxes on motor fuels, mostly gasoline, and diesel, which are critical for their budgets. We estimate that states and local governments collected about $53.4 billion in 2022. In addition, the federal government collected another $36 billion for the same year— mostly spent on maintaining roads, bridges, and transportation infrastructure.
EOA’s Main Takeaway
The Biden Administration is pushing to electrify the transportation system through massive and unprecedented subsidies. With the high penetration of electric vehicles, how will policymakers compensate for tax revenues on gasoline and diesel? First, they will have to eliminate subsidies before imposing taxes on electric vehicles. Now imagine the ramifications! This is just another reason why we are bullish on oil in the medium and long term.
STORY OF THE DAY
In an interview with Energy Intelligence published on March 14, Saudi Energy Minister Prince Abdulaziz bin Salman was asked about his views regarding the US Congress reintroducing the Nopec bill, and his reply was: “…So if a price cap were to be imposed on Saudi oil exports, we will not sell oil to any country that imposes a price cap on our supply, and we will reduce oil production, and I would not be surprised if others do the same.”
Today, Attaqa, an Arabic media platform focusing on energy issues, was the first to publish a story citing Algeria's energy minister as reiterating what his Saudi counterpart had said, and rejecting interference by the US Congress — without naming it— in the oil market and OPEC’s affairs.