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Low Gas Prices Could Mean Delayed Road Projects

Gas USA is selling gas for 97.9 cents a gallon, Monday, March 30, 2020, in Cleveland.
Gas USA is selling gas for 97.9 cents a gallon, Monday, March 30, 2020, in Cleveland.

The price of oil plunged last week, and gas prices followed suit. Low prices are great for consumers but are problematic for road construction. Kentucky and Ohio pay for road improvement projects in part with fuel tax revenue. INDOT spokesman Scott Manning says Indiana does too.

"Some of the funding is tied to volume of fuel purchased and then a portion just comes from sales tax. And that is based on price paid at the pump," he says.

Manning says it's not clear yet how low prices will affect the amount of money generated to pay for roads.

"That will impact the long-term ability of, not only INDOT to do projects at the state highway level, but also our cities, towns and counties that receive a portion of gas tax revenue. It's going to impact their construction programs also."

Lighter traffic does have some upsides: Manning says there's less wear and tear on roads, and crews are able to get more done. He says traffic levels are about half what they were.

"In the short term, we're seeing projects move forward and things continue, business as usual on the road construction front, but that impact on revenue, we do anticipate will require not only us but local governments to take another look at our long-term construction program," Manning says.

A spokesman for ODOT says Ohio's fuel taxes aren't tied to the price, but fewer people are driving, and that means less fuel consumption. Matt Bruning says there will be an impact for the state's roads, but they don't know what that impact will be yet.

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