The state of Indiana has been in the midst of a gas price epidemic for some time now. While the world struggled to recover from the COVID-19 pandemic, the demand for oil and gas in the state surged, driving up costs considerably. The state’s average price per liter rose by 63% between March and April 2020 compared to the same period in 2019.
To be more specific, the price of a gallon of regular gas in Indiana rose from $2.47 to $4.03 between the dates listed above, representing an increase of 64%. This increase is largely attributed to the COVID-19 pandemic and the subsequent stay-at-home orders in place across the country. The average price of a gallon of refined oil also increased by 62% in the state during the same time frame from $2.39 to $3.82.
In addition to the gas price increase, demand for oil and gas in general spiked in the state during that same time period. The American Petroleum Institute (API) reported that gas consumption in April 2020 was 17.7 million barrels per day, representing an increase of 12% over April 2019 levels. The same report also noted that the overall demand for crude oil in the U.S. during April 2020 was 12.9 million barrels per day, an increase of 15% from April 2019 levels. (Source:
Given the above, it is not difficult to see why speedways, one of the major motorsport venues in the U.S., decided to raise its gas prices this past year. The tracks had to make up for the revenue they lost due to the pandemic and the decrease in vehicle counts. However, they had to keep their prices at or below what other parts of the country were paying.
For those unfamiliar, the state fair is a popular event that occurs every summer in Indiana. The event is open to the public and features various carnival-style rides, games, and other attractions. One of the biggest events during the state fair is the Indianapolis 500, an annual race that takes place at the end of May. The race is one of the most prestigious events in all of motorsport.
The venue that is home to the Indy 500, the Indianapolis Motor Speedway, introduced a new gasoline station this past year (2020) that sells gas at a significantly higher price. The gas station is called Speedways Gas Price and it is the only one of its kind at the track. This is most likely because their existing stations at the track were selling gas at a discount due to a volume discount.
While the track’s existing stations were not selling gas at cost, they were charging closer to cost after taking into account the volume discount. However, with the pandemic and the drop in demand, the track decided to raise their prices to cover the additional costs of purchasing gas at wholesale prices. This move by the track was necessitated due to the fact that they did not want to lose revenue during the pandemic, but they also did not want to lose customers either.
If you visit the track’s website, you will see that the prices at their service station have increased by about 20 cents per gallon since the beginning of the year. While this may not seem like a significant increase, keep in mind that a year ago they were selling gas for $2.47 per gallon and now they are charging $4.00. The fact that they are now charging almost the exact amount that the rest of the country is paying for gas makes it evident that this is no ordinary service station.
Why Are They Doing This?
The increase in gas prices in general is a global issue that has persisted for quite some time now. While oil prices fell due to the overabundance of supply during most of 2019, they have started to creep up since the start of 2020. While it is not necessarily a bad thing that gas prices are increasing, it does indicate inflation is on the horizon. This is not good for the economy in general.
The fact that the state of Indiana is experiencing an inflation problem is evidenced by the fact that the cost of living in the state is now 17% higher than it was in April 2019. Looking at the cost of living index provided by Numbeo, which compares the cost of living in various cities all over the world, it is evident that things are not good. Specifically, the cost of living in Indianapolis is 24% higher than the US overall average. Inflation is a global issue and it is being felt across the world. (Source:
With the increase in energy prices comes the fear of energy shortage. During the pandemic, there were a number of concerns over whether or not there would be an increase in energy prices or if they would remain relatively stable. While prices are going up, we can at least take comfort in knowing that there is plenty of oil and gas in the world. (Unless, of course, you’re one of the millions of people who have lost access to basic necessities because of pandemic restrictions.)
This brings us to the next point. While the increase in prices is concerning and indicative of inflation on the horizon, the fact that they are having to increase prices at all is evidence that demand has outpaced supply, which is something we have not seen in decades. This is largely because of the impact that the COVID-19 pandemic has had on the world’s demand for oil and gas. As someone who owns a car dealership, Andy Breese of The Fuel Dealerships had this to say about the gas price increase:
“It’s a little scary that at a time when everyone is trying to keep a lid on prices, gas prices have gone up 7 cents per gallon in just the last month. It’s crazy. I mean, you’d think that during a time like this people would be conserving more, not less. This is really bad for our industry. I mean, no one, aside from the most diehard car enthusiasts, is driving right now. Everyone is staying at home and relying on their vehicles less. This is the worst scenario possible for us. The majority of our business comes from referrals and repeat customers who are driving to Ferrari, Maserati, and other elite car dealerships seeking a good deal on a new vehicle. So while it’s great that gas prices have increased, it’s killing our business.”
The fact that people are driving less is one of the main reasons why fuel consumption is down by 11% in the U.S. since before the pandemic in March 2020. While this sounds like good news at first, it also means there is less demand for oil and gas, which in turn means there is less revenue for the oil and gas companies, which in turn means they have to raise prices to make up for the lost revenue.
While the increase in gas prices is not something to cheer about, it does mean there is some good news. Specifically, at least we know that in terms of fuel efficiency cars are now attractive. Looking at all-time performance figures for cars, it is evident that fuel efficiency has risen over the years. This is largely because of technological advances and better fuel injection systems, but it also means that, in some cases, cars are now more efficient than they’ve ever been before. This makes it possible to achieve a higher degree of efficiency while still having decent gas mileage. It would be great to see more people adopt these newer, cleaner vehicles, but at least we know that they are now attainable.
What About The Increase In Diesel Prices?
Diesel cars are generally more fuel efficient than their gasoline counterparts, which means they use less gas. This makes them more eco-friendly than gasoline-powered cars. However, what happens when you need to go over 30 miles per hour? The answer is that you have to stop infusing so much fuel into your engine. This is because of the way engines work. When you exceed certain speeds, your engine requires more oxygen to function properly. Oxygen is found in air, which we are already breathing. During the time when you are driving on a flat surface, you are not breathing much, if any, air, which means your oxygen levels are low. This is why you have to stop at times like this to let your oxygen replenish itself. When you stop at these times, you also stop getting fuel injected into your engine, which causes your gas mileage to decrease. (The oxygen in the air reacts with the fuel, causing it to be burned more slowly and less efficiently.)
It’s not just the lack of oxygen that causes your gas mileage to decrease when you are driving at high speeds. The fact that you are moving causes friction and heat, which are the opposite of what your engine needs to operate at its optimum capacity. This is why you have to drive slower in the summer than you do in the winter. The heat of the day and the friction caused by going over 20 mph decreases the efficiency of your engine. (In the winter, you have to go over 20 mph to get anywhere, so you don’t have to slow down that often.)