Indiana residents will see a slight price dip at the gas pump after Gov. Mike Braun suspended the 7% gas usage tax Wednesday.
The state’s 36-cent-a-gallon excise tax remains in place, along with the federal gas tax. The suspension doesn’t affect diesel fuel. Cutting the usage tax brings the cost per gallon down by just over 17 cents.
Locally on Wednesday, Meijer in Portage sold gas for $4.29 a gallon while warehouse clubs Sam’s and Costco were at $3.84, according to Gasbuddy.
Revenue from the usage tax is used for local and state road construction. Braun pegged the loss to the state at about $50 million but said it wouldn’t disrupt major state road projects.
Braun’s signing of an emergency declaration comes after gas prices soared across the globe after President Donald Trump launched a war, along with Israel, against Iran. The average cost of gas per gallon in Indiana jumped from $2.80 a gallon to $4.13, according to AAA.
In response to the strikes by the U.S. and Israel, Iranian forces blocked the critical Strait of Hormuz, its main waterway for ships to transport oil. The uncertainty of the oil supply raised prices globally.
Indiana Gov. Mike Braun speaks to local officials at the Emergency Operations Center in Lake Village during a tour of the tornado-damaged area on Thursday, March 12, 2026. Indiana residents will see a slight price dip at the gas pump after Braun suspended the 7% gas usage tax Wednesday. (Kyle Telechan/for the Post-Tribune)
Braun, who praised Trump for negotiating a two-week ceasefire, said the order could be extended if the emergency continued.
Braun, an ally of Trump, didn’t mention the war until seven minutes into his news conference.
Indiana’s combined gas tax of about 72 cents ranks the state among the nation’s highest. Indiana’s gas tax ranks No. 5 nationwide, according to a recent Kiplinger report.
Republicans applauded Braun’s move, but state Democratic Party Chair Karen Tallian leveled criticism.
“Gas prices are up over a dollar per gallon and Braun’s solution is to give us back 17 cents? This is yet another 17-cent idea from a 17% approval rating governor,” said Tallian in a release.
Former State Senator Karen Tallian, an Ogden Dunes resident, is chair of the Indiana Democratic Party. (Photo courtesy of the Indiana Democratic Party)
“Republicans are letting oil companies use this crisis to jack up prices at the same time they screw over BP refinery workers in Northwest Indiana,” she said.
Senate Pro Tem President Rodric Bray, R-Martinsville, said: “Republicans have led on issues of affordability for years, resulting in one of the lowest costs of living in the country for Hoosiers, but the recent spike in gas prices is still leaving many Hoosiers feeling undue pressure on their budgets.
“With affordability top of mind right now, I’m supportive of temporarily suspending the state’s sales tax on gas.”
Sen. Dan Dernulc, R-Highland, joined other GOP senators in urging Braun to issue the declaration.
“In addition to our work this session on cutting taxes, this is a solid next step in making life more affordable for all those in Indiana. Suspending the gas tax is a tangible way for Hoosiers to feel relief from the rising cost of living,” said Dernulc.
Sen. Rodney Pol, D-Chesterton, blamed the war in Iran. “The need for this relief is due to Trump spending billions in a totally unnecessary war that has strangled the flow of oil overseas while BP locks out 800 refinery workers here at home.”
Carole Carlson is a freelance reporter for the Post-Tribune.