INDIANAPOLIS — Prices for regular unleaded gasoline were down more than 15 cents a gallon on average Friday, barely 48 hours after the governor suspended all gas taxes.
Indiana levies two taxes on gas. One is a use tax, which serves as the de facto sales tax. That tax is calculated monthly and is set at 23.3 cents per gallon for May. The other is the excise tax, which is set annually and is 36 cents per gallon for this year.
Gov. Mike Braun suspended the use tax on gas in April in response to price spikes caused by the war with Iran.
On Wednesday, he renewed the use tax suspension for another month and also suspended the excise tax, which had remained in place.
Prices have already begun to drop. According to GasBuddy, the statewide average for regular gas was $4.76 per gallon at midday Wednesday, when Braun issued his order. By midday Friday, it had fallen to $4.59 per gallon.
Democratic strategist and "All INdiana Politics" contributor Lara Beck said it's hard to say if the governor's order is responsible for that price drop. Even if it was, she said it's a one-time shot of relief that might jeopardize road funding.
"Even though you might get you might save 20, 25 cents on a gallon of gas, you're still not going to see those road improvements. That takes away from that," she said. "So what ends happening is what do you do next? Do you tap into the surplus? Do you know do you have to have a special legislative session? I don't think you'd want to have a special legislative session so really the options aren't that great."
Fellow "All INdiana Politics" contributor Mario Massillamany, the chair of the Hamilton County Republican Party, said he believes Braun's order played a role in the price drop.
I think it was a great move on his part because he understood that Hoosiers are hurting and he wanted to try and make some sort of impact," he said. "And so I think that Hoosiers are feeling a little bit of relief at the pump however that's only limited period of time and so again, Trump has to fix this Iran problem by the end of summer otherwise it will be a problem this November."
Not all gas stations will lower prices equally. Taxes are levied at the wholesale level, so prices paid at the pump reimburse retailers for the upstream costs. Any gas delivered prior to the governor's order has already been taxed and, thus, retailers can still levy higher prices to recover costs. Gas prices also are affected by refining and transportation costs.
"All INdiana Politics" premieres on WRTV at 11:30 p.m. on May 10.
