Georgia Becomes First State to Suspend Gas Tax as Prices Rise, Shortages Loom

As demand for gasoline jumped 20 percent nationwide Tuesday, Georgia's governor took the lead among state leaders with an executive action aimed at curbing demand following last Friday's debilitating ransomware attack on the Colonial Pipeline. Governor Brian Kemp suspended the state's gas tax and declared a state of emergency as a direct result of the petroleum shortages caused by the cyberattack.

Energy data collection website Gas Buddy said that five states—Georgia, Florida, South Carolina, North Carolina and Virginia—collectively saw gasoline demand skyrocket more than 40 percent on Monday alone. The 5,500-mile Colonial Pipeline supplies nearly half the diesel and gasoline consumed along the entire East Coast.

Energy analysts say Kemp's Tuesday executive order to head off the shortage is likely the first of many in several states this week.

In Georgia, the taxation is 28.7 cents per gallon of gas and 32.2 cents per gallon of diesel, according to the state Department of Revenue. Before Kemp's announcement, gas prices hit a national average of $2.99 per gallon, the highest such figure in six years.

"Today, I signed an executive order suspending the gas tax in Georgia to help with higher prices as a result of the Colonial cyberattack. We are working closely with Colonial and expect for them to recover by the end of the week," Kemp said. He noted that the order also increases the weight limit for supply trucks traveling through Georgia.

"Unfortunately, extensive media coverage has caused people to panic, which has resulted in higher gas prices," the Republican governor said.

"We expect these measures to be temporary, as Colonial plans to be fully up and running later this week," the governor continued. "There is no need to rush to the gas station to fill up every tank you have and hoard gas. With the measures we have taken today, I am hopeful we can get more supply to stations and get through to this weekend, when we hope Colonial will return to normal."

Kemp also noted in his statement that Georgia's Bureau of Investigation will be actively pursuing those suspected of price gouging amid the shortages. State lawmakers in Florida and the Carolinas tweeted at their respective governors to at least consider state of emergency measures should the pipeline blockage continue to create problems.

However, such a move is very unlikely in numerous states. Several oil and gas experts said on social media that "California would collapse if they suspend" their statewide gas tax.

Authorities believe the cyberattack on the pipeline was orchestrated by a criminal group of hackers called DarkSide.

Newsweek reached out to the governors' offices in Florida and Georgia for comment on efforts to curb the risk of a massive, prolonged gas shortage but did not hear back before publication.

pump
A gas pump is out of order as residents prepare for Hurricane Dorian on August 29, 2019, in Winter Springs, Florida. Gerardo Mora/Getty