States with the Cheapest Gas

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5. Kansas
> Price per gallon: $3.00
> Unemployment rate: 5.9% (14th lowest)
> Total state taxes: 25 cents per gallon (23rd lowest)
> Number of refineries: 3 (tied for 14th most)

Kansas is one of the nation’s larger oil-producing states — at about 130,000 barrels per day — and also one of the larger refining states, with an operating capacity of nearly 340,000 at the start of this year. But the state also likely benefits from its location on the Keystone Pipeline, which passes through the middle of the state. Two major points on the pipeline are Steele City, Neb., and Cushing, Okla. — where oil prices are settled and various types of oil are blended. Both cities are located fairly close to their state’s respective border with Kansas. The lower gas prices contribute to lower transportation costs as well — which were lower in Kansas than in all but six other states as of the second quarter of 2013.

4. Texas
> Price per gallon: $2.98 (tied for 3rd lowest)
> Unemployment rate: 6.4% (17th lowest)
> Total state taxes: 20 cents per gallon (tied for 11th lowest)
> Number of refineries: 27 (the most)

Texas has 27 oil refineries — by far the most of any state. Its refining capacity was also well above that of any other state as of the beginning of this year, at nearly 4.8 million barrels per day. The presence of natural resources and refineries likely helps lower gas prices in the state. In Richardson, located near Dallas, gas is as cheap as 2.67 per gallon. Despite the low cost of fuel in Texas, state legislators recently approved an incentive program that will offer rebates to buyers of electric and natural gas vehicles. The incentives are expected to be available next April.

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3. Arkansas
> Price per gallon: $2.98 (tied for 3rd lowest)
> Unemployment rate: 7.4% (19th highest)
> Total state taxes: 21.8 cents per gallon (15th lowest)
> Number of refineries: 2 (tied for 17th most)

In the past year, gasoline prices in Arkansas have dropped from $3.24 per gallon to less than $3 per gallon. Residents clearly benefit from the state’s proximity to Texas and Louisiana, the nation’s two largest refining states. Arkansas’s relatively low incomes and cost of living may also play a role in keeping gas prices down. Last year, the median household income in Arkansas was just over $40,000, lower than any other state except for Mississippi. Consumer prices are also lower in Arkansas than in much of the rest of the nation, and the cost of transportation in Arkansas is one of the lowest in the country.

2. Oklahoma
> Price per gallon: $2.97
> Unemployment rate: 5.3% (11th lowest)
> Total state taxes: 17 cents per gallon (4th lowest)
> Number of refineries: 5 (6th most)

Oklahomans pay state taxes of only 17 cents per gallon of gasoline, compared with the nationwide average of about 31 cents per gallon. Oklahoma has access to abundant natural resources, including oil. It extracts more than 300,000 barrels of oil per day, among the most in the country. The state’s five oil refineries are capable of refining more than 500,000 barrels per day. In addition to large quantities of oil, Oklahoma also sits on a vast resource of natural gas, more than all but three other states as of 2011. Median household income was well below the nation’s average in 2012. The cost of living, however, was among the nation’s lowest.

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1. Missouri
> Price per gallon: $2.86
> Unemployment rate: 7.2% (22nd highest)
> Total state taxes: 17.3 cents per gallon (5th lowest)
> Number of refineries: 0

Missouri has the lowest gas prices in the nation at just $2.86 per gallon. Yet, the state does not produce or refine any oil. Like several other states, Missouri is advantaged by its proximity to refineries in Louisiana and Texas, as well as to major points along the Keystone Pipeline. The Mississippi River is also used to transport oil and other products, and it connects the Gulf of Mexico and Louisiana with Missouri. Additionally, residents of Missouri pay some of the lowest gas taxes in the nation, totaling just 17.3 cents per gallon.

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