Gasoline tax Definition
A Gasoline Tax (or gas tax or fuel tax) is a tax imposed on the sale of gasoline. Often (e.g. in the United States) the funds are dedicated or hypothecated to transportation, or even roads, so that the gas tax is considered by many a user fee. In other countries, the gas tax is considered a source of general revenue and is not designated for roads. The demand for the automobile is relatively inelastic, a one percent increase in the price of gas will reduce demand by much less than one percent.