Michigan gas prices stay elevated, higher than national average

This is according to the latest data from AAA.

Compared to Thursday, the average from regular unleaded across the state has risen nearly 10 cents from $4.28. That’s a similar increase from last week’s price of $4.26, but up more than a dollar from last year’s $3.16.

“Current GasBuddy scorecard – Americans today spent $356 million more on gasoline than they did one year ago,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

Mid-grade fuel in Michigan currently averages $4.96 per gallon, while premium stands at $5.56. Diesel averages $5.39 per gallon, up from $3.73 a year ago.

Diesel reached a historic average high in Michigan on May 14, according to AAA’s records.

Gas prices across the country could continue to rise as tensions involving Iran escalated again this week. But according to De Haan, drivers in the Great Lakes region may feel the impact more acutely as ongoing refinery issues continue to constrain regional fuel supplies.

“Beware in Michigan with prices down 12c in the last week and refinery snags, a hike could be looming soon,” De Haan said earlier this week.

He also warned that the fall months might bring little relief for drivers, bucking previous trends.

“In ~7 days, you're going to see new all-time records set for highest August gas prices ever—even compared to 2022. At the current $4.08/gal, August 5th will be the date we're able to say the national average is at its highest level ever for the date,” De Haan said. “The national average price of gasoline has *never* any year been above $4/gal after August 8. Looking like we could break that this year, and I don't like that one bit.”

Neighboring Indiana stands in sharp contrast to Michigan, consistently posting some of the nation's lowest average gas prices. On Friday, Indiana once again had the lowest average price for regular unleaded at $3.63 per gallon—$0.74 less than Michigan's average.

One big reason for Indiana’s consistently low prices is the recent temporary suspension of its 7% Gasoline Use Tax and 36-cent Gasoline Excise Tax.

On the flip side, Michigan recently raised its gas taxes. Yet, De Haan is pushing back on media reports that this is contributing to the state’s higher fuel prices.

“The tax shift in Michigan actually lowered the gas prices Michiganders would pay when gas prices are above $3.50/gal, and it also gives Michigan certainty on revenue so it didn’t fluctuate wildly. So the tax shift is currently resulting in 'lower' gas prices,” De Haan said on Friday morning. “Over ~$3.50/gal prices are lower under the new tax system. Under $3.50/gal they’d be slightly higher. Under $2.50/gal they’d be moderately higher with the new system.”

Nationally, California continues to have the highest average gas prices at $5.65 per gallon.