Why is gas expensive in Michigan?
Michigan drivers pay $3.53 per gallon, about 14 cents above the national average. The state applies its 6% sales tax to motor fuel — one of only about a dozen states that does — adding roughly 20 cents per gallon on top of the state excise tax. The Detroit metropolitan area also falls under federal Reformulated Gasoline rules.
What you're paying for
State taxes and policy in Michigan add an estimated $0.60 per gallon on top of the roughly $2.93 base cost (crude oil, distribution, and the federal excise tax) that every U.S. driver pays.
Against its neighbors
Amber line marks the U.S. average of $3.38.
Price over time
Michigan U.S. average
Michigan, explained
Why is gas more expensive in Michigan than the national average?−
Two main factors. First, Michigan applies its 6% state sales tax to motor fuel, adding about 20 cents per gallon at current wholesale prices. Most states with low gas prices do not do this. Second, the Detroit metropolitan area uses federal Reformulated Gasoline, adding about 8 cents per gallon for drivers in Wayne, Oakland, and Macomb counties. Combined with a moderate excise tax, these factors put Michigan about 14 cents above the national average.
How is the Michigan gas tax calculated?+
Michigan has three layers of state-level tax on motor fuel. First, the state excise tax: 31.0 cents per gallon in 2026, indexed to inflation since 2017. Second, the state sales tax: 6% of the retail price, applied to motor fuel as to other taxable goods. At a $3.50 retail price, the sales tax adds about 20 cents per gallon. Third, a small petroleum cleanup fee of about 1 cent per gallon. Total state burden is about 52 cents per gallon.
Does Michigan have a cap-and-trade program for motor fuels?+
No. Michigan has not enacted any cap-and-trade program or low-carbon fuel standard covering transportation fuels. The state's MI Healthy Climate Plan, released in 2022, sets carbon-reduction goals but does not include a transportation-fuel pricing mechanism. There is no active legislative proposal.
Why is Detroit gas more expensive than rural Michigan?+
Detroit, Wayne County, Oakland County, and Macomb County are designated ozone non-attainment areas under the federal Clean Air Act and require federal Reformulated Gasoline (RFG) blends. RFG-blend gasoline costs about 8 cents per gallon more than conventional fuel. Rural and northern Michigan use conventional federal-spec gasoline and pay slightly less. The price gap between metro Detroit and the rest of Michigan is typically 5 to 10 cents per gallon.
How does Michigan's refining base affect prices?+
Michigan has three operating refineries: Marathon Detroit, Husky Energy Detroit, and a smaller asphalt-focused facility. Combined gasoline output is about 240,000 barrels per day, supplying roughly a quarter of in-state demand. As our regression shows, refinery presence does not directly lower retail prices once taxes and refining region are accounted for, but it does provide supply security and reduce vulnerability to pipeline disruptions.
Why do Michigan prices rise every year automatically?+
Michigan's state excise tax is indexed to inflation through the Consumer Price Index. The tax rate is adjusted each January 1 based on the prior 12 months of inflation. The 2017 enactment of indexation has produced annual increases of 1 to 3 cents per gallon every year since. The sales-tax component also rises automatically with wholesale prices.