Gas prices in Kentucky are about to go up. Here's when and why (2025)

Olivia Evans, Louisville Courier Journal

Updated ·4 min read

Kentuckians will soon see higher price tags at the fuel pump.

Starting July 1, gas will increase by 2.1 cents per gallon due to the expiration of Gov. Andy Beshear’s June 2022 emergency regulation that froze the motor fuel tax across the Commonwealth.

“I want Kentuckians to understand this process because it impacts us all at the pump,” said Gov. Beshear in a Team Kentucky update in May. “We are doing everything we can to try to help keep more money in the pockets of our hard-working Kentucky families and to provide some relief in these challenging times.”

Nationally, regular unleaded gasoline averaged $3.573 per gallon according to AAA on June 26. In Kentucky, the average price per gallon for regular unleaded gas was 24 cents less at $3.333.

However, several counties are already experiencing higher than national gas prices at the pump. In Jefferson County, the average price is $3.813, while Oldham County is $3.73 and Shelby County is $3.614 (as of June 26).

Meanwhile, the western part of the state has multiple counties below $3 per gallon. Bell County had the lowest average gas price in the Commonwealth at $2.97 per gallon.

Last year I froze the state gas tax to help Kentuckians save as much as $35.4 million. At that time, I called on the General Assembly to extend the freeze to help our families, but they failed to act.

As a result, the gas tax rate will increase 2.1¢/gallon July 1. 1/3

— Governor Andy Beshear (@GovAndyBeshear) May 25, 2023

Here’s what we know about the gas tax increase.

What is the gas tax?

The motor fuels taxgas tax — is a tax on gasoline and other combustible fuels and liquids that could be used to fuel motor vehicles.

This tax revenue goes to the Kentucky Road Fund and supports road construction and maintenance across the state. In June 2022, a press release from the governor’s office noted that the gas tax freeze would decrease Road Fund revenue by 1.6% but to remedy this loss, the governor planned to use funds from the General Fund.

Laura Goins, the Deputy Chief of Staff for Media Relations for the Office of the Speaker, noted the 2.1 cent per gallon savings would be equivalent to "less than a quarter per fill up for most consumers." Goins said members of the House Majority Caucus had concerns about the "extremely negative impact" a long-term suspension would have on the Road Fund.

Why did the emergency regulation gas tax freeze expire?

The emergency regulation gas tax freeze expired because the General Assembly failed to take action prior to the Feb. 27 expiration date.

In June 2022, Governor Beshear signed an emergency regulation following the jump in Kentucky gas prices to more than $4 per gallon.

“Freezing the average wholesale price of gasoline … will help protect Kentuckians from the harm a higher gas tax would bring on top of other negative effects of rising inflation,” the governor wrote in the emergency regulation.

The emergency regulation was filed in direct response to meet an “imminent threat to the public health, safety or welfare” and had to be temporary in nature.

In January, Beshear wrote a letter to House and Senate leadership alerting them the gas tax freeze would expire on Feb. 27. House Minority Leader Derrick Graham filed House Bill 89 on Feb. 23 which included language to maintain the gas tax freeze through June 30, 2024.

Gas Tax-Letter to Leadershi... by Courier Journal

The General Assembly failed to take action to prevent the expiration of the emergency regulation and they did not pass HB 89.

On Feb. 28, a day after the emergency regulation expired, Beshear once again wrote a letter to House and Senate leadership to inform them of the expiration which would allow a two-cent gas tax increase in March and a second gas tax increase of 2.1 cents July 1.

"Members of the House Majority Caucus are committed to enacting tax policies that benefit all Kentuckians," Goins said. "In addition, there is no way to guarantee the savings reach Kentuckians since anyone who purchases gasoline pays the tax, so a considerable proportion is levied on those traveling to and through the Commonwealth."

Gas Tax Letter to the Gener... by Courier Journal

The governor estimates the emergency regulation helped Kentuckians save up to $35.4 million through January 2023. The estimated savings were derived from an estimation of gas consumption and the 2-cent savings from the freeze and was calculated by the Office of the State Budget Director.

"Lawmakers will continue to monitor as the statutorily required increase is implemented and potentially take the issue up again in January," Goins said.

This story may be updated.

Contact reporter Olivia Evans at oevans@courier-journal.com or on Twitter at @oliviamevans_

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This article originally appeared on Louisville Courier Journal: Kentucky gas prices increasing

Gas prices in Kentucky are about to go up. Here's when and why (2025)

FAQs

Gas prices in Kentucky are about to go up. Here's when and why? ›

Kentuckians will soon see higher price tags at the fuel pump. Starting July 1, gas will increase by 2.1 cents per gallon due to the expiration of Gov. Andy Beshear's June 2022 emergency regulation that froze the motor fuel tax across the Commonwealth.

Why are gas prices going up in KY? ›

The nearly 30-cent increase in the cost of a gallon of gas in Kentucky over the last month is largely due to higher crude oil prices, according to AAA Bluegrass. Gas prices in Kentucky are up nearly 30 cents a gallon since last month – to an average of 3-38 a gallon.

What is the real reason for gas prices going up? ›

Underlying the higher costs of gas are routine factors including refinery maintenance, the switch to summer gasoline and rising demand. Domestic supply is also impacted as refineries take advantage of milder weather conditions to do necessary maintenance.

How much is gas in Kentucky right now? ›

Kentucky average gas prices
RegularPremium
Current Avg.$3.299$4.216
Yesterday Avg.$3.307$4.226
Week Ago Avg.$3.330$4.239
Month Ago Avg.$3.299$4.218
1 more row

Is gas cheaper in KY or in? ›

State Gas Price Averages
StateRegularMid-Grade
Indiana$3.552$4.069
Kansas$3.167$3.485
Kentucky$3.279$3.788
Louisiana$3.114$3.534
47 more rows

What is the gas tax in Kentucky? ›

​Effective July 1, 2024, per gallon motor fuel tax rates for Kentucky are as follows: ​Gasoline - 26.4 cents. Liquefied Petroleum - 26.4 cents. Special Fuels - 2​3.4 cents.

Who controls the price of gasoline? ›

Petroleum prices are determined by market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.

Why is gas so high right now in 2024? ›

Warm-weather travelers are driving up demand for gas, experts said. Gas prices have surged higher at the outset of 2024, stressing household budgets and complicating efforts to cool inflation.

How much will gas be in 5 years? ›

The Gas price prediction for 2025 is currently between $ 2.67 on the lower end and $ 4.98 on the high end. Compared to today's price, Gas could gain 27.96% by 2025 if GAS reaches the upper price target.

What state has the cheapest gas right now? ›

US Gas Price Report
  • Texas - $3.086 per gallon. You can find the cheapest gas price in Texas, where the average cost is $3.086 per gallon. ...
  • Mississippi - $3.124 per gallon. The state with the second cheapest gas price is Mississippi, with an average cost of $3.124 per gallon. ...
  • Oklahoma and Missouri - $3.136 per gallon.

How much was gas in 1997 in kentucky? ›

YearJanDec
19960.7530.881
19970.8700.747
19980.6950.557
19990.5620.923
39 more rows

How much is the average gas bill in Kentucky? ›

Utility Costs in Kentucky
UtilityAverage Kentucky Bill
Electricity$125
Gas$128
Cable & Internet$102
Water$31

Why did gas prices go up in Kentucky? ›

As gas stations transition to more expensive fuels that produce fewer emissions in the warm weather, demand for gasoline is also on the rise, according to data from the Energy Information Administration. But more expensive oil, now hovering around $80 a barrel, is also to blame for the rising prices.

Are groceries cheaper in KY? ›

The cost of living in Kentucky is 7% lower than the national average. Housing is 22% lower than the national average, while utilities are 2% higher. When it comes to basic necessities such as food and clothing, groceries are around 3% lower than in the rest of the country, while clothing costs 3% lower.

What city has the cheapest gas? ›

Table of Contents
  • Kansas City, Missouri.
  • St. Louis.
  • Wichita, Kansas.
  • Colorado Springs, Colorado.
  • Denver.
  • Tulsa, Oklahoma.
  • Tucson, Arizona.
  • Aurora, Colorado.
Mar 7, 2011

What is causing oil prices to rise? ›

Like most commodities, the fundamental driver of oil's price is supply and demand in the market. The cost of extracting and producing oil is also an important factor. Oil markets are composed of speculators who are betting on price moves, and hedgers who are limiting risk in the production or consumption of oil.

Where do we get our crude oil from? ›

About 12% of U.S. total petroleum imports and 12% of U.S. crude oil imports were from Persian Gulf countries in 2022. Petroleum imports from Canada have increased significantly since the 1990s, and Canada is now the largest single source of U.S. total petroleum and crude oil imports.

How does inflation affect gas prices? ›

higher inflation tends to lead to higher oil prices. In the longer term, if the Federal Reserve raises interest rates and slows economic growth to control inflation, oil prices could decline as a result.

What are the five areas that increased energy prices impact? ›

Final answer: Increased energy prices impact household budgets, business costs, environmental sustainability, geopolitical tensions, and the global economy.

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