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Gas prices break $5 across Indiana, puts citizens, policymakers in bind

Gas Prices AAA 06-09-2022

Gas Prices in Indiana on June 9, 2022 (American Automobile Association )

Indiana’s gasoline prices are breaking records, following a national trend.  

The state is currently above the national average at $5.23 per gallon. Monroe County is even higher, at $5.25 per gallon, according to the American Automobile Association.  

Suspension of the gas tax is seen as one way to reduce costs. Indiana Democrats, such as Rep. Mitch Gore (D-Indianapolis) are calling on the governor to suspend the tax, according to a news release.  

“It’s immoral to not act amidst the struggle of working-class folks being unable to afford to go to work,” the release said.  

Nikolaos Zirogiannis, assistant professor of environmental economics policy at IU, is not certain that a suspension of the tax would be sound policy. He is concerned that relief wouldn’t last and would take away revenue that the tax provides for infrastructure. 

“By artificially decreasing that price, it’s giving people the incentive to actually use more gasoline, which will eventually result in the price going back up again,” Zirogiannis said.  

President Biden banned the import of Russian oil in response to Russia’s invasion of Ukraine, leading countries to look for supply in other places.  

“Now those countries have to find alternative suppliers of oil to fill in their demand for gasoline,” Zirogiannis said. “That additional demand is starting to stretch the limits of current production.”  

It isn’t an easy process for oil suppliers to increase production, either. He says that suppliers decide about their supply output several months, maybe even several years, in advance.  

AAA says that pump prices will remain high as long as demand increases and supply is strained.  

“There's many, many things that come into play here and extremely hard to make predictions, especially in the short term,” Zirogiannis said.  

To stay updated on gas prices, check the AAA website.

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