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Kentucky Gov. Beshear to Cut Fuel Taxes by 10 Cents
Planned Tax Hike Stopped; Price-Gouging Law Is in Effect
Key Takeaways:
- Kentucky reduced gasoline and diesel taxes by 10 cents per gallon starting May 11 under an emergency order.
- The state estimates the tax cut could save $26.8 million combined over a one-month period.
- Local governments cautioned the move may temporarily reduce road and infrastructure funding.
To alleviate higher fuel prices, Kentucky Gov. Andy Beshear activated price-gouging laws, stopped a planned fuel-tax hike and reduced diesel and gas taxes by 10 cents per gallon.
“I recognize the pain our families are feeling, and I’m taking steps to help because it’s the right thing to do,” Beshear said May 5. He issued Executive Order 2026-235 declaring a state of emergency linked to higher fuel prices due to the Iran war.
The state’s average price per gallon for diesel was $5.371 and for gas was $4.318 as of May 7, according to AAA. Year-ago averages were $2.842 for gas and $3.247 for diesel.
The 10-cent decrease on motor fuel taxes starts May 11, per the Kentucky Department of Revenue. The cuts will drop the diesel and biodiesel taxes to 12 cents per gallon from 22 cents. Gasoline and liquefied petroleum also will decrease by 10 cents to 15 cents per gallon.
The decrease for both regular and diesel fuel has the “potential to save Kentuckians $26.8 million combined over a one-month period,” Beshear’s announcement stated.
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Beshear
Next, he implemented the price-gouging law to enforce the lower prices and “ensure providers don’t keep the 10 cents,” his office added.
Rick Taylor, president and CEO of Kentucky Trucking Association, voiced support for state residents benefiting from the 10-cent tax drop.
“We want to make sure the full amount of the 10-cent reduction is passed on to our citizens, commuters and other travelers who are being hit the hardest by the pump price increase,” Taylor said.
The governor signed an emergency regulation freezing the fuel taxes before an automatic hike of 2 cents per gallon took effect July 1.
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Taylor
“The trucking industry is a longtime supporter of adequate funding for our roads and bridges, as this is vital to our daily operations," Taylor said. “However, given the recent spike in fuel prices, which has caused an undue hardship on Kentucky families and trucking companies in Kentucky, we applaud the proactive effort to control/lower fuel prices in the commonwealth.”
The Kentucky League of Cities noted that the governor’s actions will lower prices at the pump.
“While the order is expected to provide financial relief to consumers, it will also result in a temporary decrease in motor-fuels tax revenue,” KLC stated. “Because those revenues support Kentucky’s Road Fund and are partially distributed to cities through Municipal Road Aid payments, local governments may see a reduction in funding for road and infrastructure projects during the period the order is in effect.” Meanwhile, the Bureau of Transportation Statistics issued an April snapshot of motor-fuel prices May 5. April’s average price for diesel No. 2 was $5.50 a gallon (up 11.8% from March) and 54.2% higher than in April 2025, BTS stated.
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Regular gas averaged $4.10 a gallon in April (12.8% higher than March) and 29.4% more than the same time last year.
Regional Gas Prices
The highest per-gallon percentage increases year over year, according to the Bureau of Transportation Statistics.
- New England: $3.98 (+ 35.3%)
- Gulf Coast: $3.71 (+ 35.2%)
- Lower Atlantic: $3.86 (+ 30.5%)
- Central Atlantic: $4.08 (+ 30.1%)
- West Coast: $5.38 (+ 26.5%)
- Midwest: $3.83 (+ 26.5%)
- Rocky Mountain: $3.94 (+ 25.6%)
