Kentucky governor freezes state gas tax, activates price-gouging law and urges Congress to suspend federal gas tax

Gov. Andy Beshear said Thursday that he has signed an emergency regulation and issued an executive order designed to lower fuel prices for Kentucky drivers and guard against price gouging.

"I signed an emergency regulation to freeze the gas tax and prevent a further hike on July 1," Beshear said. He added the executive order reduced the state gas tax for gasoline and diesel by 10 cents per gallon and that he had activated the state's price-gouging statute "to enforce the reduction and ensure providers don't keep those 10¢."

Beshear told reporters the administration estimates the 10¢ reduction could save Kentuckians a combined $26.8 million over one month. He said he also sent letters to Kentucky's congressional delegation urging them to suspend the federal gas tax "until the end of the year or until the end of the war." "Our president is now saying he'll suspend the federal gas tax," Beshear added, framing the request as a complementary federal action.

Why it matters: Kentuckians facing higher prices have pressed state leaders for relief, and the governor framed the move as a direct way to give immediate, measurable savings to households. The cut will reduce revenue available for roads and related infrastructure that are typically funded by the state gas tax.

Budget trade-offs and questions from reporters: When asked by Bridal Wooten of WDRB whether the monthly savings create a matching loss in infrastructure funding, Beshear acknowledged the fiscal impact. "So, yes, it creates a $26,000,000 hole in our road budget," he said, adding the administration plans to defer some work and ask the General Assembly to use a portion of Kentucky's rainy-day fund to backfill the road fund.

Beshear described the decision as prioritizing immediate household relief: "I'd rather our people get by and me have to worry about a budget issue than the opposite."

Legal and enforcement steps: Beshear said the gas tax reduction came with an executive order declaring a state of emergency on gas prices and activated the price-gouging statute to give regulators a tool to punish sellers who fail to pass along the cut. He said the order took effect on the Monday before the briefing.

What’s next: Beshear said he has urged congressional action on the federal gas tax and that enforcement officials will monitor retailers to ensure the state tax reduction is passed on to consumers. The administration did not provide a timetable for how long the state reduction will remain in effect; Beshear tied the federal request to the broader international situation that he said is affecting energy markets.