Gas prices are down from the peak they hit earlier this year in April and May, yet the national average still hovers around $4.08, according to the American Automobile Association, an increase of almost a dollar annually.
However, the average gas price in Indiana is currently $3.43, the lowest in the nation. This is a result of Governor Mike Braun suspending the Gasoline Excise Tax (GET) and the Gas Usage Tax (GUT), which saves Hoosiers 58.9 cents per gallon, according to the Indianapolis Capital Chronicle.
Braun first suspended the GUT (also referred to as the gas sales tax) back in April by signing an executive order declaring an energy emergency, stating that “the ongoing war with the leading state sponsor of terrorism, the Islamic Republic of Iran, has threatened the global supply of oil.” However, this energy emergency only allowed Braun to suspend the two taxes for a maximum of 120 days, per Indiana law. Any further suspension would require him to call the Indiana General Assembly to a special session to seek the approval of state legislators.
Professor of Political Science at the University of Indianapolis, Laura Merrifield Wilson, said that this put Braun in a “difficult position” as special sessions are “costly” and “typically highly unpopular.” This led many to believe that the suspensions would end on Aug. 6, and cause gas prices in the state to spike up almost 60 cents seemingly overnight. However, Braun would surprise many by declaring a new Energy Emergency via executive action on Aug. 5, citing new factors such as the conflict between Russia and Ukraine and the recent Canadian Wildfires, according to WFYI Indianapolis. Wilson stated that this move was not surprising once Braun determined that he had the legal authority to declare a new energy emergency.
“He is generally unpopular with the state legislature, so why bring them back?” Wilson said. “It doesn’t seem like they would, but they could choose to go against the renewal of the gasoline tax holiday.”
While the gas tax holiday has saved Hoosiers money at the pump, it could potentially deprive local governments of funding for infrastructure projects, according to Mirror Indy. The tax suspension costs the state roughly $140 million every single month, a portion of which is distributed to county, city and town governments.
Braun has said that he will reimburse local governments to make up for the lost revenue, according to the Indianapolis Capital Chronicle. Indiana Comptroller Elise Nieshalla announced reimbursements of $37 million dollars for the period between April 8 and May 31 on July 21, and $43 million dollars for the month of June on Aug. 18. Braun stated that this is only possible because “we are running government more efficiently,” allowing him to leverage Indiana’s reserve fund, which had nearly $4 billion in it at the end of the fiscal year for 2026, according to WFYI.
Wilson notes that “it is not clear that these will be one-to-one reimbursements,” and that the uncertainty could cause issues for local governments.
“Local governments are already hurting under Senate Enrolled Act One, which revised property taxes, so they’re getting less funding,” Wilson said. “And to add insult to injury the flooding we have had recently has required a tremendous amount of local resources that were already stretched thin.”
Wilson stated that the tax suspension will come to an end eventually, with Braun and his administration “hedging their bets on the fact that gas will go down a little bit” in the near future, mitigating the financial strain of reinstating the two taxes. However, Wilson also noted that this depends partially on factors largely outside of Braun’s control, such as “global oil reserves” and the “status of the Strait of Hormuz”, and that the end of the tax holiday will likely “hurt regardless.”
