Comment on the December 14 prediction: The prediction of no reset was CORRECT for that week, but prices rose to $2.99 again on Monday, the 22nd.
Sunday, December 28, 2025, 8 PM: For our final post of 2025, it is time to dive into the changes in Michigan gas tax laws that go into effect this week. For years, there have been three taxes in play at the pump: the 31 cents/gallon state fuel tax, the 18.4 cents/gallon federal fuel tax, and the 6% state sales tax. Starting Thursday, there will only be two taxes that apply, as the state sales tax will no longer be included. Instead, the state fuel tax will rise to 52.4 cents/gallon, and it will increase each year at this time based on the inflation rate. The federal fuel tax will remain the same, as it has since 1993.
The main purpose of these changes is to direct more tax money to road construction.
What do these changes mean for the retail price? It appears that on Thursday, the state of Michigan will collect 10 cents more a gallon than it will on Wednesday this coming week. Doing the math this afternoon to come up with 10 cents, at first I thought I had made an error. But, if you apply a bit of algebra, comparing the old tax calculation with the new one, you will see that the total state tax is the same if the wholesale price is $3.38/gallon. (The equation to solve is below, and does not factor in “middlemen” charges like transportation from the refinery.) Now this is weird — the largest wholesale price in my spreadsheet the past two years was … $3.38/gallon! This was on May 22, 2024, and was part of an odd, two-day up-and-down spike that we reported on at that time. For the most part, the wholesale price has averaged around $2.10 for the past two years.
Today, though, the wholesale price is in the $1.50 – $1.60 range, so the sales tax is less than it was on that day in May 2024. 10 cents less.
So, with a 10-cent-a-gallon tax hike this week, expect a statewide reset this week, probably on Thursday, but they might do it sooner. It will be at least $2.99 again, but $3.09 is possible. And then we move into January, when gas prices usually start a six-month march higher. Happy New Year. -EA
The equation: (whole + 0.184)*1.06 + 0.31 = whole + (0.184 + 0.524)
Checking GasBuddy shows Michigan and Indiana close in price for cheapest in either state. Hopefully not a big deal for summer road trips. Indiana has been fortunate to have increased competition from Wawa. Haven’t been in one yet but always fill up in a Wawa price war area. The first location in Daleville had a 6 month price war. ?
Price reset in SW Ohio to $2.899. I was able to fill up at the UDF in Dent for $2.339 -6 cent discount while the sign was shown at the reset price. The 56 cent price jump is one huge boost.