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Oil Prices Plunge, But Taxes Delay $2 Gasoline

PITTSBURGH (KDKA) - The price of crude oil dropped below $30 on Friday, plunging the stock market.

"The market reacts to news, and I'm going to tell you it overreacts in the short term," says Kim Forrest, a senior analyst with Ft. Pitt Capital.

Stock prices are down eight percent in two weeks, but Forrest says sit tight.

"Never, ever take action out of fear or greed. You're probably going to get burned, especially on a non-taxable account like a 401K," Forrest told KDKA money editor Jon Delano.

The market is reacting to crude oil dropping from a $100 a barrel in 2014 to just over $29.

There's too much oil on the market.

"A lot of countries are bringing excess supply on at a time when we have excess supply, and thus that continues to drive the market down."

One positive is lower gasoline prices at the pump.

AAA a says the average Pennsylvania price is $2.10 a gallon -- $2.13 here in Pittsburgh.

"At least they're trending downward compared to what they've been the last couple of months," noted Ryan Lawlor of Bethel Park.

Still, the national average is just $1.95.

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It's bad enough that the average price of gasoline in Pittsburgh is higher than the state average.

But what really kills us is that 25 miles to the west are two states which have significantly lower gasoline prices.

Why? Because their gas taxes are much lower than ours.

"Pennsylvania has the dubious distinction of having the highest combined federal and state gas tax in the nation," says Gregg Laskoski, senior petroleum analyst at GasBuddy.Com.

Laskoski says it's not even close.

"The national average tax per gallon is 48.6 cents per gallon. In Pennsylvania it's 73.7 cents per gallon."

In West Virginia, the tax is 53 cents with gas at a $1.89, while Ohio's tax is 46 cents with gas prices at a $1.74 per gallon.

PennDOT says higher taxes were needed to repair 40,000 miles of roads and 25,000 bridges, but consumers still want under two dollar gas.

"Get it below. Get it to the national average," says Lawlor.

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