Indiana drivers welcome relief at the pump as gas tax is suspended for 30 days

LOUISVILLE, Ky. (WDRB) — The 7% usage tax on gasoline in Indiana was suspended for 30 days starting Wednesday, bringing prices below neighboring Kentucky.

Indiana Gov. Mike Braun announced a gas tax holiday to give Hoosiers relief from rising gas prices. After the 30-day suspension, the state will conduct a review.

Braun said the state will patrol the pumps to monitor prices and ensure savings.

"I am declaring a gas tax holiday to give Hoosiers relief from the pain at the pump from high gas prices," Braun said in a news release. "Affordability is my top priority."

Braun said the 30-day suspension of the state’s gas tax will save drivers roughly $50 million. The move is expected to reduce prices by about 17 cents per gallon. The relief comes as retail gas prices also dropped by about 20 cents in some locations overnight.

The tax on gasoline in Indiana is layered and, for many drivers, confusing. It has two primary components: an excise tax that changes once a year and a gasoline use tax that adjusts monthly.

The state’s gasoline excise tax is currently set at 36 cents per gallon. That rate is scheduled to increase by one cent in July. On top of that is the gasoline use tax, which functions similarly to a sales tax and is recalculated each month. It’s based on 7% of the statewide average price of gasoline, excluding taxes.

As of April 2, 2026, the total tax on a gallon of gasoline in Indiana is about 71 cents. The gasoline use tax currently accounts for roughly 17.2 cents of that total.

Current Tax Breakdown (April 2026)
- In addition to the 17.2-cent use tax, Indiana drivers pay several other fixed taxes at the pump:
  - State Gasoline Excise Tax: 36 cents per gallon (fixed from July 1, 2025, to June 30, 2026).
  - Federal Gas Tax: 18.4 cents per gallon.
  - Oil Inspection Fee: 1 cent per gallon.

Total combined taxes for April 2026 are approximately 72.6 cents per gallon.

For comparison, Kentucky’s gas tax stands at 26 cents per gallon and is adjusted annually.

With the temporary tax suspension, Indiana gas prices are running about 20 cents lower than neighboring Kentucky. According to our reporting, regular unleaded in Louisville is around $4.39 per gallon, with some stations a few cents lower.

Across the region, prices vary:

Lexington: about $4.20
Cincinnati: about $3.94
Indianapolis: about $4.00
Nashville: about $3.96
Evansville: about $4.10

For some drivers, the savings, while modest, are still welcome.

Shane Bennett had just finished work and stopped to fill up before heading home.

"Just got done with work and on my way home, filling up, getting ready to cut grass," Bennett said.

Bennett said he budgeted more than $100 for gas, enough to fill several cans for his mower and top off his truck. So far, he said higher prices haven’t forced him to change his plans — but that could change if costs keep climbing.

Other drivers said any savings help, especially as families balance rising costs.

"I appreciate any assistance we can get from anyone out here. Gas prices are just so high — I have never seen them this high," said Illinois driver Mickey Brooks. "For some people they can make it, but for other people they have to choose: am I going to fill up my tank or am I going to put food on the table?"

Indiana Democrats also welcomed the relief and said the temporary cut will make a difference for Hoosiers.

"It will make a difference to Hoosiers’ pockets. I think 17.2 cents a gallon — I think it is important to look at," one Democratic lawmaker said.

Back at the pump, Bennett finished filling five gas cans and his truck — about 33 gallons total. With the sales tax suspended, he saved about $5.60.