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Indiana gas tax not expected to have significant impact next month

By Donnie Burgess

Posted December 24, 2024

IU business economics professor Kyle Anderson speaks on the state's gas tax

(Kyle Anderson, IU Business Economics Professor)

The price of gas has been around three dollars a gallon for the last several weeks. Indiana University economics professor Kyle Anderson told WFIU/WTIU News that price is unlikely to change much next month.

Anderson said Indiana’s gas tax adds between 50 and 60 cents per gallon. An additional 18 to 19 cents per gallon comes from a federal tax. Both versions of the tax fund road construction and maintenance.

Indiana’s gas tax comes from the state taking a percentage of the average price of a gallon of gasoline. Anderson said that formula shouldn’t have a noticeable impact on your wallet over the next few weeks.

“That is basically unchanged from December to January,” he said. “So, you won’t see any change and it usually moves in small amounts. That part of it is only a couple of cents in one direction or another from month-to-month.”

While those taxes may appear to add a large amount of money on top of what you pay at the pump, Anderson said it is global supply and demand that has a much bigger impact.

Global supply and demand, and overall oil production, is usually affected by conflict in the Middle East and Russia’s war with Ukraine.

Anderson said holidays may bring brief spikes in gas prices, but those changes usually don’t last long. He said summer months often lead to higher gas prices due to increased travel.