INDIANAPOLIS — Indiana drivers are seeing continued decreases in the gasoline use tax. However, that doesn’t mean they will see relief at the pump.
The Indiana Department of Revenue recently published the gasoline use tax calculation for February. The calculation shows the rate starting February 1 will be 17.2 cents, down from 19.9 cents in December. In comparison, the gasoline use tax in February 2022 was 17.3 cents.
The department calculates the gasoline use tax by taking the average retail price per gallon of gasoline in the prior month and multiplying it by the state retail tax of .07 cents. The state said the average retail cost was $2.4508.
While the gasoline use tax has decreased in recent months, the tax has increased steadily since it reached its lowest point on record in June 2020.
In addition to the gasoline tax, people buying gasoline pay additional state and federal taxes. As of July 2022, people pay 33 cents per gallon in gas excise tax, which goes towards infrastructure projects, and a federal tax of about 18 cents per gallon.
Indiana has one of the highest gas excise taxes in the country. Only 13 states have a higher gas excise tax than Indiana, according to data compiled by IGEN. However, both the neighboring states of Ohio and Illinois have higher gas excise taxes.
If the average retail cost of gasoline remains at $2.4508 in February, people would end up paying around $3.13 at the pump. As of January 26, AAA reports the average cost of gas in Indiana is about $3.364.
“The recent rising temperatures led to rising pump prices,” said Andrew Gross, AAA spokesperson, “And with the cost of oil hitting $80 a barrel, there is a lot of upward pressure on gas prices at the moment.”
Gas Buddy reports that concerns are increasing that without additional oil, supply will tighten in the weeks ahead. Moving forward, prices will likely continue accelerating.