Gas prices rose to more than $5 per gallon in some parts of Indiana this week, and time is running out on Gov. Mike Braun’s gas tax holiday.
Local experts question whether the tax holiday has made a difference for Hoosier consumers.
“People don’t really change their driving habits because the price of gas changes,” said Anthony Sidone, visiting clinical associate professor of economic development at Indiana University Northwest. “The price of gas goes up a little bit — actually it’s gone up a lot over the last couple months — and people still drive about the same as they did before.”
Braun suspended Indiana’s 7% gas usage tax on April 8, which brought the cost per gallon down by a little more than 17 cents, according to Post-Tribune archives. The tax holiday came after President Donald Trump and Israeli leadership launched a war against Iran and gas prices surged.
The suspension ends May 8, and Braun has the chance to renew it. Braun’s office was unable to immediately respond to a request for comment.
Indiana Attorney General Todd Rokita, on Tuesday, launched IN Fuel Watch, a public online portal that shows “real-time gasoline prices” at more than 4,600 gas stations statewide. The website has color-coded indicators for each station, which are green for those prices dropping more than 17 cents below the April 8 level, yellow for moderate changes and red for any increases.
“Hoosiers deserve clear, accessible information about gas prices in their communities,” Rokita said in a statement. “IN Fuel Watch gives you the ability to check local prices and see how they compare across the state. We know every penny matters right now and are committed to making sure you are treated fairly at the pump during this time.”
According to IN Fuel Watch, from April 1 through 7, the state’s average gas price was $3.93, and it rose to $4.137 on April 8. As of Friday, it was $4.726. More than 2,100 gas stations were in the red range, which is a 33-cent increase from the April 8 price.
Just 123 Indiana gas stations dropped more than 17 cents from the price at suspension. The average change since April 8 is 58.9 cents, according to IN Fuel Watch on Friday.
A Hammond Shell station at 3350 Calumet Ave. was $5.50 per gallon on Friday, according to IN Fuel Watch, a 136.3-cent increase from April 8. It was the second most expensive station in Indiana, according to the website.
A BP station in Cloverdale was the most expensive, priced at $6 per gallon.
Patrick De Haan, petroleum analyst at Gasbuddy, said gas prices across the Great Lakes jumped Wednesday, adding that it was caused by issues at various refineries, including BP’s Whiting refinery, which briefly lost power Sunday night.
“On top of that, we also have oil prices that have gone up considerably in the last week, especially early this week, after President Trump made it clear that he may extend a blockade on the Strait of Hormuz by several weeks,” De Haan said.
A BP spokesperson declined the refinery’s role in surging gas prices in a Thursday statement.
“We do not speculate on market pricing, nor do we set oil prices,” the statement said. “On the night of April 26, 2026, some units within the Whiting Refinery experienced a brief loss of electric power. Power to those units was quickly restored and operations were returned to normal. The power interruption was electrical system-related and not the result of operator actions.”
De Haan said he doesn’t expect to see much improvement in the coming weeks, especially as the threat to block the Strait of Hormuz continues.
“Removing the tax initially caused a nice drop in the price of fuel in Indiana,” De Haan said, “but obviously, with the price of oil rising up sharply in the last couple of weeks, it hasn’t really been impactful lately.”
If high prices continue for a longer period of time, people might change their driving habits, Sidone said, but changing it for a month has “very little impact.”
The state will feel more of an impact than consumers, Sidone said. The Indiana Department of Revenue says that the state could lose $50 million in tax revenue.
“Where would that $50 million go if it was there?” Sidone said. “The tax is used to repair roads. So if there’s a $50 million shortfall statewide to repair roads, from a macro-perspective, we might see some more stresses on road repair.”
If the governor extended the suspension, the state could lose $100 million, Sidone said.
If the tax holiday continues long-term, Sidone said other industries might be impacted, but he can’t see a large impact. Higher prices might affect local economies, though.
“If people aren’t driving as much, that’s maybe fewer trips to the grocery store or fewer trips to local restaurants,” Sidone said. “Of course, it would have a ripple effect throughout the entire economy if this kind of increase in gasoline is sustained for, like I said, a very long time.”
Kyle Anderson, an economist at the Indiana University Kelley School of Business, said the gas tax holiday was more of a political move than an economic move.
“The impact that it’s going to have on Indiana families is pretty small. I understand (Braun) wanting to do this politically to make it look like he’s doing something, but I don’t think it’s going to have a material impact on Hoosier families,” Anderson said.
Gas prices have increased since the U.S.-Israel attacked Iran, Anderson said, and Braun isn’t responsible for that action and its impacts on Indiana.
“I don’t know that it’s the governor’s responsibility to cushion the impact of these market outcomes that are happening from supply and demand and global prices,” Anderson said. “The higher gas prices aren’t Gov. Braun’s fault. They’re related to our policy in the Middle East and our conflict in the Middle East.”
Eliminating the 17-cent-per-gallon sales tax means, on average, that a family will save less than $20 a month at the pump, Anderson said.
When gas prices increase, that increases the cost of goods and some services because of the transportation costs, Anderson said. Companies tend to pass that cost on to consumers, he said.
In that respect, Anderson said bringing down the gas tax could help lower the cost of gas, goods and services, but “we’re bearing significantly higher costs overall.”
Indiana started a gas tax because, as truckers and passenger vehicles travel through Indiana, the drivers began paying into the state when stopping for gas, Anderson said. But when one tax gets cut, then another tax or cost of a good is likely to increase, he said.
Gas prices have become a large subject when discussing inflation and politics because it is a necessary good, especially in Indiana, as employees have to drive many miles to work every day, Anderson said.
With gas stations displaying the price of gas daily, it’s also a visible price for a specific good that other goods, like groceries, don’t broadcast, Anderson said.
“Nothing is out there the way the price of gasoline is,” Anderson said. “With gasoline, we seem to be very attuned to it. As a country, we have strong feelings like, ‘I want gasoline to be $3 a gallon,’ or however we set that in our mind. Americans tend to have a strong feeling about it.”
mwilkins@chicagotribune.com, akukulka@post-trib.com
