The Lead Off
- Gov. Mike Braun says Indiana may have flexibility to extend its temporary gas tax suspension beyond the June 7 expiration date.
- The suspension currently removes both the state gasoline use tax and excise tax, totaling about 59 cents per gallon.
- Analysts say most of the tax savings have already been passed on to consumers at the pump.
INDIANAPOLIS, IND. (WOWO) Gov. Mike Braun said Indiana may have the authority to extend the state’s temporary gas tax suspension as the June 7 expiration date approaches, though a final decision has not yet been made.
Braun told the Indiana Capital Chronicle Friday he plans to evaluate whether to continue the suspension under the state’s energy emergency law.
“I’ll be looking at that,” Braun said during a news conference. “It does, yes, look like there might be flexibility to continue it.”
Current suspension covers two major fuel taxes
The current policy, first enacted through executive orders in April and May, suspends both Indiana’s gasoline use tax and its 36-cent-per-gallon gasoline excise tax.
Together, the suspension reduces state fuel taxes by roughly 59 cents per gallon.
The Indiana Department of Revenue indicated this week that, absent the suspension, the gasoline use tax rate for June would rise to 26.5 cents per gallon, up from 23.3 cents in May.
Legal authority for extension remains unclear
Braun said he will make a decision closer to the expiration date and continue evaluating the state’s energy emergency declaration.
Indiana law allows a governor to declare an energy emergency for up to 60 days and states that a proclamation may not be renewed or extended more than once without approval from the General Assembly.
House Speaker Todd Huston has suggested the governor may have authority to continue the suspension under statutory language, though legal interpretations have not been finalized.
The Indiana Attorney General’s office has not publicly addressed whether additional extensions would require legislative approval.
Impact on gas prices and consumer savings
Fuel analysts say the suspension appears to have significantly reduced gasoline prices in Indiana compared to neighboring states.
Patrick De Haan, head of petroleum analysis for GasBuddy, said most of the tax savings are now being reflected at the pump.
“Indiana is about 63 cents lower than Michigan and 66 cents lower than Ohio,” De Haan said. “I would estimate probably north of even 85% of the drop has been passed along.”
De Haan said Indiana gasoline prices have remained stable in recent weeks even as broader regional markets have fluctuated due to refinery issues and global oil price volatility.
Indiana’s average gasoline price Friday was $4.005 per gallon, compared to the national average of $4.552, according to AAA.
Potential for rapid price changes if suspension ends
De Haan warned that prices could rise quickly if the tax suspension is allowed to expire next month.
“If the suspension expires, your prices are going to dramatically climb, probably within 12 hours of it coming back into play,” he said, estimating increases of more than 60 cents per gallon.
He added that once the suspension ends, fuel prices will again be driven primarily by broader oil market conditions rather than state tax policy.
The Takeaway
Governor weighs extension as deadline approaches
Gov. Mike Braun is considering whether to extend Indiana’s gas tax suspension beyond June 7, citing potential authority under the state’s energy emergency law.
Fuel taxes currently reduced by about 59 cents per gallon
The temporary suspension removes both the gasoline use tax and excise tax, significantly lowering state fuel costs for motorists.
Analysts say savings largely reaching drivers but future prices uncertain
Market experts estimate most of the tax relief is already reflected at the pump, though prices could rise quickly if the suspension ends as scheduled.
