diff --git a/block/block.go b/block/block.go
index bfa8c28f4..bb5e3d41f 100644
--- a/block/block.go
+++ b/block/block.go
@@ -107,12 +107,16 @@ type Header struct {
 	Height         uint
 	Time           time.Time
 	Fees           uint64
+	GasPrice       uint64
 	NumTxs         uint
 	LastBlockHash  []byte
 	LastBlockParts PartSetHeader
 	StateHash      []byte
 }
 
+// possible for actual gas price to be less than 1
+var GasPriceDivisor = 1000000
+
 func (h *Header) Hash() []byte {
 	buf := new(bytes.Buffer)
 	hasher, n, err := sha256.New(), new(int64), new(error)
diff --git a/block/tx.go b/block/tx.go
index 0958dcb2e..5bf5dfc59 100644
--- a/block/tx.go
+++ b/block/tx.go
@@ -10,14 +10,15 @@ import (
 )
 
 var (
-	ErrTxInvalidAddress    = errors.New("Error invalid address")
-	ErrTxDuplicateAddress  = errors.New("Error duplicate address")
-	ErrTxInvalidAmount     = errors.New("Error invalid amount")
-	ErrTxInsufficientFunds = errors.New("Error insufficient funds")
-	ErrTxUnknownPubKey     = errors.New("Error unknown pubkey")
-	ErrTxInvalidPubKey     = errors.New("Error invalid pubkey")
-	ErrTxInvalidSignature  = errors.New("Error invalid signature")
-	ErrTxInvalidSequence   = errors.New("Error invalid sequence")
+	ErrTxInvalidAddress       = errors.New("Error invalid address")
+	ErrTxDuplicateAddress     = errors.New("Error duplicate address")
+	ErrTxInvalidAmount        = errors.New("Error invalid amount")
+	ErrTxInsufficientFunds    = errors.New("Error insufficient funds")
+	ErrTxInsufficientGasPrice = errors.New("Error insufficient gas price")
+	ErrTxUnknownPubKey        = errors.New("Error unknown pubkey")
+	ErrTxInvalidPubKey        = errors.New("Error invalid pubkey")
+	ErrTxInvalidSignature     = errors.New("Error invalid signature")
+	ErrTxInvalidSequence      = errors.New("Error invalid sequence")
 )
 
 /*
diff --git a/state/state.go b/state/state.go
index a3d98d05c..48420befa 100644
--- a/state/state.go
+++ b/state/state.go
@@ -4,6 +4,7 @@ import (
 	"bytes"
 	"errors"
 	"fmt"
+	"math/big"
 	"time"
 
 	"github.com/tendermint/tendermint/account"
@@ -234,7 +235,7 @@ func (s *State) AdjustByOutputs(accounts map[string]*account.Account, outs []*bl
 
 // If the tx is invalid, an error will be returned.
 // Unlike AppendBlock(), state will not be altered.
-func (s *State) ExecTx(tx_ blk.Tx) error {
+func (s *State) ExecTx(tx_ blk.Tx, blk_ *blk.Block) error {
 
 	// TODO: do something with fees
 	fees := uint64(0)
@@ -296,8 +297,15 @@ func (s *State) ExecTx(tx_ blk.Tx) error {
 		}
 		accounts[string(tx.Address)] = outAcc
 
-		// TODO: fees
-		// inTotal -= fees
+		// ensure sufficient gas price
+		// we multiply to avoid dividing
+		bigProvidedFee := new(big.Int).Mul(big.NewInt(int64(tx.FeeLimit)), big.NewInt(int64(blk.GasPriceDivisor)))
+		bigMinFee := new(big.Int).Mul(big.NewInt(int64(blk_.GasPrice)), big.NewInt(int64(tx.GasLimit)))
+		if bigProvidedFee.Cmp(bigMinFee) < 0 {
+			return blk.ErrTxInsufficientGasPrice
+		}
+
+		inTotal -= tx.FeeLimit
 
 		// Good! Adjust accounts
 		s.AdjustByInputs(accounts, []*blk.TxInput{tx.Input})
@@ -306,6 +314,8 @@ func (s *State) ExecTx(tx_ blk.Tx) error {
 
 		// TODO: Run the contract call!
 
+		// TODO: refund some gas
+
 		return nil
 
 	case *blk.BondTx:
@@ -640,7 +650,7 @@ func (s *State) appendBlock(block *blk.Block, blockPartsHeader blk.PartSetHeader
 
 	// Commit each tx
 	for _, tx := range block.Data.Txs {
-		err := s.ExecTx(tx)
+		err := s.ExecTx(tx, block)
 		if err != nil {
 			return InvalidTxError{tx, err}
 		}
diff --git a/state/state_test.go b/state/state_test.go
index f719df075..b9b900300 100644
--- a/state/state_test.go
+++ b/state/state_test.go
@@ -183,7 +183,7 @@ func TestTxSequence(t *testing.T) {
 		tx := makeSendTx(sequence)
 		tx.Inputs[0].Signature = privAccounts[0].Sign(tx)
 		stateCopy := state.Copy()
-		err := stateCopy.ExecTx(tx)
+		err := stateCopy.ExecTx(tx, &blk.Block{})
 		if i == 1 {
 			// Sequence is good.
 			if err != nil {
@@ -242,7 +242,7 @@ func TestTxs(t *testing.T) {
 		}
 
 		tx.Inputs[0].Signature = privAccounts[0].Sign(tx)
-		err := state.ExecTx(tx)
+		err := state.ExecTx(tx, &blk.Block{})
 		if err != nil {
 			t.Errorf("Got error in executing send transaction, %v", err)
 		}
@@ -279,7 +279,7 @@ func TestTxs(t *testing.T) {
 			},
 		}
 		tx.Inputs[0].Signature = privAccounts[0].Sign(tx)
-		err := state.ExecTx(tx)
+		err := state.ExecTx(tx, &blk.Block{})
 		if err != nil {
 			t.Errorf("Got error in executing bond transaction, %v", err)
 		}