Michigan Gas Premium over Indiana Hits 80 Cents per Gallon
Michigan drivers pay an average of $4.26 per gallon, while Indiana charges $3.46. The gap has widened significantly in recent months.
Key points
- Michigan average gas prices hit $4.26 per gallon in late August. Indiana prices were $3.46 per gallon during the same period.
- Indiana refineries produce 54% of local fuel demand. Michigan imports all its gasoline from distant Gulf Coast sources.
- Indiana suspended its state fuel tax for six months. This suspension explains two-thirds of the price difference between the states.
Michigan drivers paid an average of $4.26 per gallon on August 28. This figure stands 23% higher than the $3.46 average in neighboring Indiana.
The Mackinac Center notes this premium appeared five months ago. State policies and refinery infrastructure drive much of the cost difference.
Refinery Gaps Drive Import Costs
Indiana refineries produce 1.6 billion gallons of gasoline annually. This covers 54% of the state total demand for fuel.
Michigan relies entirely on imports because its single refinery does not make gasoline. Longer pipeline routes increase distribution costs for Michigan consumers.
Tax Differences Impact Pumps
Indiana suspended its fuel tax from April 8 to October 5. This holiday accounts for two-thirds of the current price gap.
Michigan tax rates are 52.4 cents per gallon. Ohio rates are lower at 38.5 cents, creating further price disparities.
Regulatory Mandates Raise Summer Prices
Southeast Michigan requires a specific summer ethanol blend called SIP 7.0. This mandate adds 10 to 20 cents per gallon to local prices.
Canadian wildfire smoke affects ozone readings in the state. These readings trigger federal requirements for high-vapor fuel standards.
