Gasoline prices at Washington area service stations began jumping yesterday as dealers started passing on the new five-cent-a-gallon federal tax that takes effect nationwide today.
Actual increases varied from station to station, according to an informal survey, with some raising prices by 5 cents a gallon, others going up 3 cents a gallon and a few holding their prices steady--at least for the moment.
Koo Yuen, the area's largest single gasoline retailer, was among the first to raise pump prices to reflect the higher tax. As of noon yesterday, he said, all 26 of his stations had gone up 5 cents a gallon.
"We adjusted our prices in anticipation of the tax," said Yuen, whose company operates 22 stations in the District of Columbia, 3 in Maryland and 1 in Virginia. "We have taken the position that this the five-cent increase will be the price in the market."
Other dealers indicated they may raise prices selectively, increasing the prices of gasoline at only some locations and for some classes of service.
"We have a couple of stations, and we may keep prices at one of them at $1.059 a gallon for regular leaded and raise prices at the other station where the price is only $1.019 a gallon for regular leaded," said James Buchanan, assistant manager of Steuart's Car Wash, 420 S. Van Dorn St., Alexandria. He said those were the self-service prices for cash customers.
Bill Hutchinson, manager of Circle Exxon, 5521 Connecticut Ave. NW, said he may keep his full-service prices at their present level but raise self-service prices. However, he doesn't expect to go up the full five cents even on self-service, he said.
"What we do, we will do Friday morning and it will depend on what everyone else does," he said. "But we aren't going up the whole nickel, because if I go up 3 cents a gallon, I won't be losing," he said.
However, all dealers probably will raise prices by a nickel a gallon eventually, according to Vic Rasheed, director of the Service Station Dealers of America, which represents 60,000 retailers. "It will be virtually impossible for a dealer not to pass that cost through to motorists, because his profit margins are so low he really doesn't have any latitude," Rasheed said.
The nickel tax is expected to generate $5.5 billion a year in additional revenues for the Highway Trust Fund, to repair the nation's crumbling transportation system. Four cents will be earmarked for highways and bridges; the other penny will be for mass transit.
Congress passed the new tax, which brings the federal tax on gasoline to 9 cents a gallon, after a bitter fight during the lame-duck session. President Reagan, who pushed for the increase, estimated that the nickel tax will cost the average car owner about $30 a year, "less than the cost of a couple of shock absorbers."
That $30 figure is based on a motorist who drives about 10,000 miles a year and gets about 16.5 miles per gallon from his car, according to Joe Rhodes, a special assistant in policy planning at the Federal Highway Administration.