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Low December oil prices did not weaken oil and gas tax collections in Eddy County during March, said Eddy County Finance Director Roberta Smith.
The County collected $5.6 million from oil and gas businesses, read County finance records.
Smith said March’s collections were based on December 2021 business’ activity when the price for a barrel oil was around $68.
More:Fluctuating oil prices do not hamper February oil and gas tax collections for Eddy County
She presented the tax collection numbers during the May 3 Eddy County Board of County Commissioners meeting.
The price of West Texas Intermediate (WTI) light sweet crude oil was $71.71 a barrel during December 2021, according to data from the U.S. Energy Information Administration (EIA).
WTI was the world’s most actively traded energy product, per the Chicago Mercantile Exchange.
Oil and gas tax collections are a major funding source for Eddy County government.
Smith said tax collections for the last three months of the 2022 fiscal year would remain strong based on WTI prices for early 2022.
“We’ll see that increase by around $500,000 except for June that will increase by $1 million that’s due to the price of oil being $105 or $106 a barrel for that business activity,” she said.
January prices were $83.22 a barrel. The price increased to 91.64 in February and rose to $108.50 in March, per figures from the EIA.
EIA projected oil prices well above $100 a barrel for the rest of 2022.
WTI prices for May 5 were $105.18, read EIA’s website.
More:Eddy County stays vigilant with future budget with high oil prices and world tension
Fiscal years in Eddy County start July 1 and end June 30.
Through March, the County collected $47 million in oil and gas taxes for fiscal year 2022.
When the 2022 budget was crafted last year, Eddy County’s Finance Department forecasted $25 million in oil and tax collections by June 30 of this year.
More:Audit report: Eddy County finances grew during five-year period
With collections well above budgeted projections. The County anticipated tax collections above $52 million, Finance Department records cited.
County Commission Chairperson Steven McCutcheon said Eddy County’s financial pictured was OK for the rest of the fiscal year.
Gross receipts tax collections consistent
Eddy County collected $3.2 million in gross receipts taxes (GRT) in March, according to Smith.
Collections were down slightly from February’s $3.6 million in GRTs.
More:2022 Eddy County oil and gas tax collections reach milestone in December
GRTs are sales taxes businesses pay that allow them to operate in the county.
Smith said Eddy County’s GRT collections averaged around $3 million during the 2022 fiscal year.
GRT fluctuations were due to reporting data collection changes enacted by the New Mexico Taxation and Revenue Department, according to Smith.
Eddy County collected $27 million in GRTs through March, per Finance Department records.
More:Eddy County collects $5.5M in November oil and gas taxes, expects summer surplus
Mike Smith can be reached at 575-628-5546 or by email at MSmith@currentargus.com or @ArgusMichae on Twitter.
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