INDIANAPOLIS — Indiana is expected to see its highest gas excise tax in December, but signs suggest there could be some relief at the pump.
The Indiana Department of Treasury recently released December’s gasoline excise tax calculation. The calculation shows that the price will be 23.3 cents as of November 1st, compared to 23.1 cents in November.
The department calculates the gasoline excise tax by taking the average retail price per gallon of gasoline for the previous month and multiplying it by the state retail tax of 0.07 cents. The state said the average retail cost was $3.3295.
This is the highest-ever gasoline excise tax in December. The tax has risen steadily since hitting its lowest level on record in June 2020. The fuel consumption tax is higher than at any point before 2022.
In addition to the gasoline tax, individuals who purchase gasoline pay additional state and federal taxes. Beginning in July, people will pay a 33 cents per gallon gas excise tax used for infrastructure projects and a federal tax of about 18 cents per gallon.
Indiana has one of the highest gas excise taxes in the country. According to IGEN, only 13 states have higher gas use taxes than Indiana. However, the two neighboring states of Ohio and Illinois have higher gas use taxes.
If the average retail cost of gasoline stays at $3.3295 in December, people would end up paying about $4.07 at the pump. On October 26, AAA reports that the average cost of gas in Indiana is approximately $3,845.
AAA reports that oil prices are being pushed lower by increasing supply and falling demand for gasoline. If demand stays low, drivers will likely continue to expect a drop in pump prices ahead of Thanksgiving.
“Everyone will see relief at the pump this week, with even sharper declines along the way, as oil prices plummeted last week and briefly traded below $80 a barrel. It’s not impossible that if oil markets hold here for Christmas we could see a national average of $2.99, certainly the gift every motorist is hoping for,” said Patrick De Haan, GasBuddy’s head of petroleum analysis. “Drivers shouldn’t be in a hurry to fill up as prices are set to drop almost coast to coast over the busy Thanksgiving holiday.”