Ohio gas prices fall as tax holiday takes effect
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios. Stock: Getty Images
Ohio drivers are already seeing results of the state's gas tax holiday — but there are bigger factors that affect the price at your gas pump.
Why it matters: Prices may still fluctuate even with the tax break in place, gas price expert Patrick De Haan warns.
Catch up quick: Ohioans normally pay 38.5 cents per gallon of gas to fund infrastructure work.
- Legislators passed a 90-day tax holiday that took effect Sunday and used state reserve funds to offset the lost revenue.
- Columbus-area gas was $3.73 on average as of Wednesday, about 50 cents cheaper than a week before, per AAA data.
What they're saying: De Haan, head of petroleum analysis at GasBuddy, tells Axios that much of the state's tax holiday is already reaching drivers.
- "It's very evident that it's being passed along very quickly."
Yes, but: The tax holiday isn't responsible for the entire drop from recent days.
- Ohio prices were already falling before the holiday. De Haan says a refinery outage that was repaired also helped push prices lower.
- A transparency wrinkle: Gas stations aren't required to show the 38.5-cent tax savings as a separate line item on customers' receipts, making it difficult for drivers to verify the exact savings themselves.
Between the lines: Ohio's gas prices have fallen much faster than neighboring Indiana's, where prices dropped about 11.5 cents over the same period, De Haan says.
- He attributes the difference in part to Ohio's highly competitive market, with more gas stations here compared to Indiana. Stations have an incentive to cut prices to attract customers, forcing competitors to respond.
- "The beauty of competition is working here to drive prices down."
The bigger backdrop: Gas prices surged in recent months as the war with Iran disrupted global oil supplies, making the Ohio tax holiday part of a broader effort to ease the pain at the pump.
Reality check: De Haan warns against expecting prices to keep falling in a straight line.
- Oil and wholesale gasoline prices were rising again Wednesday, De Haan says, which could push pump prices higher even while the tax holiday remains in effect.
- So a price increase in the coming days doesn't automatically mean a station is pocketing the tax savings.
- "The gas tax holiday does not freeze changes in the world."