Concerns about global economic weakness have pushed crude oil prices down in recent weeks. The decline was seen in gas prices, too. As of December 6, national prices averaged $3.38 per gallon, down from $3.46 per gallon a month before. Some states have kept their prices significantly below the average nationwide price. Based on data from The American Automobile Association, 24/7 Wall St. reviewed the 10 states with the lowest gas prices.
States impose gasoline taxes and fees, in addition to federal gasoline taxes. These taxes can vary significantly from state to state, affecting regional prices. It’s not surprising then to find that the ten states with the lowest gas prices tend to have among the lowest fuel taxes. The states on this list are below the median in terms of taxes and fees, with four of the states on this list among the 10 states with the lowest taxes and fees per gallon.
States with refineries also tend to have lower prices because oil can be moved to local stations at much cheaper prices, which results in lower prices at the pump. Most of the states on this list have refineries located within its borders. Texas, which has among the cheapest gas in the country, has 26 refineries, more than any other state in the country. Louisiana has 18 refineries, the second most of any state.
Overall cost of living is generally low in the states with the lowest gas prices. Tennessee, which has the fourth-cheapest gas prices, has the lowest cost of living in the country. Oklahoma, which has the fifth-cheapest gas, has the second-lowest cost of living. Overall, all the states on this list are in the lower half in terms of cost of living. And five of the 10 states on the list have among the 10-lowest cost of living.
But while cost of living is low, so is the amount of money state residents bring in. All of the states on the list had median household income in 2011 below the national median income of $50,502. Seven of the 10 states had among the 10 lowest median incomes in the country.
Based on AAA’s Daily Fuel Gauge Report, 24/7 Wall St. reviewed the 10 states with the lowest gas prices as of December 6. We also looked at gas prices from the same time last week, last month and last year, as well as peak prices this year, to monitor the recent activity of gas prices in different parts of the country. We also considered taxes and fees per gallon by state from the American Petroleum Institute, refineries and refining capacity by state from the U.S. Energy Information Administration, cost of living by state from the Council for Community and Economic Research and 2011 median household income from the U.S. Census Bureau.
These are the 10 states with the lowest gas prices.