Hoosiers will pay more at the fuel pump this month, as the gas tax increases for the third month in a row.

The Indiana Department of Revenue raised the gas use tax to 20.4 cents – about an 8 percent increase from 18.9 cents in April.

The gas use tax is updated monthly. According to a notice from the Indiana Department of Revenue, the state uses the following method to determine the tax rate:

1. The statewide average retail price per gallon of gasoline (excluding the Indiana gasoline tax, the federal gasoline tax, the Indiana gasoline use tax, and the Indiana gross retail tax (if any)),
2. multiplied by seven percent,
3. then rounded to the nearest one-tenth of one cent.

The Indiana Department of Revenue reported the average retail price per gallon of gas to be $2.92 from March 16 to April 15.

The gas use tax is separate from the state gasoline excise tax, which is 34 cents per gallon. The federal gas tax rate is 18.4 cents. That means Hoosiers will pay 72.8 cents in both state and federal taxes for each gallon of gas in May.

The tax is used to fund road construction and improvement projects. The lowest gas tax of the past year was in February, at 15.5 cents. That’s the lowest rate it had been since May of 2021.