INDIANAPOLIS — After Indiana drivers saw the highest December gasoline use tax on record, they will see some relief at the pump.

The Indiana Department of Revenue recently published the gasoline use tax calculation for January. The calculation shows the rate starting January 1 will be 19.9 cents, down from 23.3 cents in December.

The department calculates the gasoline use tax by taking the average retail price per gallon of gasoline in the prior month and multiplying it by the state retail tax of .07 cents. The state said the average retail cost was $2.8424.

This is the highest January gasoline use tax on record. The tax has increased steadily since it reached its lowest point on record in June 2020. The gasoline use tax is higher than at any point before 2022.

In addition to the gasoline tax, people buying gasoline pay additional state and federal taxes. As of July, people pay 33 cents per gallon in gas excise tax, which goes towards infrastructure projects, and a federal tax of about 18 cents per gallon.

Indiana has one of the highest gas excise taxes in the country. Only 13 states have a higher gas excise tax than Indiana, according to data compiled by IGEN. However, both the neighboring states of Ohio and Illinois have higher gas excise taxes.

If the average retail cost of gasoline remains at $2.8424 in January, people would end up paying around $3.55 at the pump. As of December 20, AAA reports the average cost of gas in Indiana is about $3.019.

“The cost of oil, gasoline’s main ingredient, has been hovering in the low-to-mid $70s per barrel, and that’s $50 less than the peak last Spring,” said Andrew Gross, AAA spokesperson. “Combined with low seasonal demand, gas prices could slide a bit more before leveling off.”  

Nationwide, GasBuddy says gas prices are forecasted to be below $3 per gallon on or before Christmas.