INDIANAPOLIS — With the tail end of winter in sight, the number of potholes is not the only thing Indiana drivers are seeing an increase in.

The Indiana Department of Revenue recently published the gasoline use tax calculation for March. The calculation shows the rate starting March 1 will be 18.6 cents, up from 17.2 cents in February. In comparison, the gasoline use tax in March 2022 was 18.4 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 $2.6605.

While the gasoline use tax has seen decreases 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 $2.6605 in March, people would end up paying around $3.35 at the pump. As of February 21, AAA reports the average cost of gas in Indiana is about $3.297. Indiana is among the states with the largest change in average gas prices.

“The national average for pump prices dipped to $3.41 before creeping a bit higher over the past two days,” said Andrew Gross, AAA spokesperson, “and this trend of small increases could persist into next week.”  

Gas Buddy reports that some pockets of the country have experienced refinery challenges while others are starting to transition to summer gasoline. Another factor impacting gasoline prices is economic concerns.

“Oil prices have softened over the last week, helping to limit any upside at the pump, with strong economic data leading to concern that the Fed will continue to use interest rates to slow the economy,” said Patrick De Haan, head of petroleum analysis at GasBuddy. This could weaken demand as we head into the peak summer driving season.”

The Associated Press reports that Inflation accelerated from December to January, and core prices excluding food and energy also rose more quickly than economists expected. Overall, prices were 6.4% higher last month compared with a year ago, barely below December’s 6.5% reading.