Multiple states are continuing to waive their fuel taxes and extend existing moratoria as households and the wider economy grapple with a surge in costs sparked by the Iran war. According to AAA, the nationwide average for regular unleaded sits at $4.41 per gallon as of Thursday, with diesel at $6.39. This compares to $3.16 and $3.71, respectively, a year ago, and the Watson Institute of International and Public Affairs estimates that American households have paid over $122 billion in additional fuel costs since the conflict began in late February.
And amid these pressures—and the expected implications for the 2026 midterms—several states have lowered or suspended their respective gas taxes. On Wednesday, Indiana Governor Mike Braun, a Republican, announced that he had signed an order extending the waiver on the state’s gas sales and excise taxes for another month. Braun signed the original "energy emergency" declaration in April, which has since been pushed back on a rolling basis.
The current iteration, running through October 5, will now last through November 4, according to the order. This came as Braun also relaxed rules around the use of dyed diesel to provide relief to the agricultural and timber sectors. "The added cost of fuel prices caused by continued disruptions to the global oil supply can make a major difference in our farmers’ success and their ability to put food on the table for their families," he wrote on X.
Newsweek has contacted the governor’s office for comment. In Indiana, the average price of gas is currently $3.81, up from $3.07 a year ago but significantly short of the state’s $5.24 record. Braun first suspended the state’s 7 percent gas sales tax in April, and paused the 36-cent-per-gallon excise tax in May—with drivers still benefiting from a roughly 61 cents reduction in pump costs per gallon.
As of October 1, around a third of U.S. states had pursued some form of tax-related relief due to the Iran war and associated fuel cost increases. These have ranged from targeted exemptions for certain sectors, with a handful implementing comprehensive sales and excise tax breaks. Georgia was the first state to enact a suspension following the launch of the war on February 28, which the Republican Governor Brian Kemp has now extended through October 29.
"Global markets remain unstable and are subjecting Georgians to unpredictable price shocks on basic goods and services, including but not limited to gasoline and diesel fuel prices," Kemp wrote in an order signed Monday. This week also saw state lawmakers pass a 90-day pause on Ohio’s gas and diesel sales taxes, in an emergency vote that secured broad bipartisan support. Ohio’s Governor Mike DeWine, a Republican, has signaled his intention to sign the bill, according to FOX19, though he has in the past warned that such a plan would jeopardize funding for the state’s department of transportation.
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