States With the Highest Gas Prices

Source: thinkstock.com

Gas prices in every state are higher than they were one month ago.  While the nationwide average price of $2.45 per gallon is far lower than levels one year ago, it has risen steadily for over a month, the longest string of consecutive daily increases in more than two years. The average price of gasoline in California rose by nearly a dollar in the past month to $3.39 per gallon, by far the largest increase and the highest gas price nationwide.

Based on statewide average prices of regular gasoline as of March 9 from AAA’s Daily Fuel Gauge Report, 24/7 Wall St. reviewed the 10 states with the highest gas prices. Avery Ash, a spokesman for AAA, explained that gas prices rise around this time every year primarily due to seasonal maintenance and production shifts. However, he added, both price levels and price spikes vary widely from year to year and between states.

Click here to see the states with the highest gas prices

Last year, prices increased in the spring due to refinery issues in the Midwest. This year, the bulk of the increases have been on the West Coast, especially in California. According to Ash, high regional gas prices this year can be attributed to increasing crude oil costs, routine refinery maintenance, and unexpected production issues.

Since the price of crude makes up the bulk of the cost of gasoline, rising crude oil prices accounted for most of the increases in the price of gas across the nation. The distance the gasoline needs to travel from crude oil production centers explains to a large degree the price of gasoline in a given state.

[protected-iframe width=”45%” height=”560″ class=”alignleft” id=”bb00432feed8a1608b2c831923a000e7-5450697-55502028″ info=”//cdn2.lockerdome.com/_js/embed.js” style=”margin: 10px 0; max-width: 550px;”]The majority of refineries are located in the Midwest and around the Gulf Coast. According to Ash, transporting fuel “from the Gulf Coast through pipeline up to the northeast requires additional transportation costs,” and this can lead to “some challenging supply distribution dynamics for the Northeast, especially during the storm season.”

Four of the 10 states with the highest gas prices are located in the northeastern United States. Hawaii, the state with the second highest average cost of gasoline, is also located a great distance from oil refineries.

In addition to a state’s location and the associated transportation costs, state gasoline taxes also have an impact on gas prices. With the exception of Alaska, drivers in all of the 10 states with the highest gas prices paid much higher total gasoline state taxes and fees than the average national gas tax rate of 29.89 cents per gallon. In addition, all drivers pay a federal excise of 18.4 cents per gallon.

To identify the states with the highest gasoline prices, 24/7 Wall St. examined the 10 states with the highest statewide average prices per gallon of regular gasoline on March 9 from AAA’s Daily Fuel Gauge Report. We also reviewed the U.S. Energy Information Administration’s (EIA) 2013 Refinery Capacity Report, which breaks out production capacity and the number of operable refineries by state. Capacity figures cited are from January 2014 and reflect the number of barrels of oil that operating refineries can reasonably be expected to produce in a calendar day. Also from the EIA, we reviewed figures on total oil production by state for 2013. We looked at gas taxes per state from the American Petroleum Institute, which are current as of January 2014. Annual 2013 unemployment rates came from the U.S. Bureau of Labor Statistics. Data on roads, vehicle miles, and gasoline consumption came from the Federal Highway Administration (FHWA). Additionally, from the Bureau of Economic Analysis, we looked at regional price parity as a proxy for cost of living.

These are the states with the highest gasoline prices.

10. Vermont
> Price per gallon: $2.54
> Operable refineries, 2014: None
> Refining capacity (barrels per day): N/A
> Total state and federal tax per gallon: 50.37 cents (13th highest)

The average cost of regular gasoline is $2.54 per gallon in Vermont, the 10th highest price nationwide. Vermont’s excise tax on gasoline of 12.10 cents per gallon is lower than the national average rate of 20.64 cents. An additional 19.87 cents per gallon is levied in Vermont, the fifth highest non-excise gas tax rate. The relatively high taxes partly account for the higher gas prices in the state. Since Vermont is not located near any large production facilities, which are found predominantly in the western and midwestern United States, the cost of transporting fuel to the state also explains the high prices. The majority of other high gas price states had relatively high unemployment rates in 2013. However, just 4.4% of Vermont’s workforce was unemployed in 2013, nearly the lowest rate among states.

ALSO READ: The Best (and Worst) Paying Cities for Women

9. Connecticut
> Price per gallon: $2.55
> Operable refineries, 2014: None
> Refining capacity (barrels per day): N/A
> Total state and federal tax per gallon: 61.62 cents (5th highest)

Connecticut spends more than all but seven other states on its roads. The state also taxes its drivers more than all but four other states. In 2012, the state spent $478,281 per mile of state-controlled highways, more than three times the national average of $158,783 per mile. As a result, residents pay among the highest gasoline prices in the nation. Connecticut drivers pay 43.2 cents per gallon in state gasoline taxes compared with a national average of 29.89 cents. The state’s taxes pushed the average price of gas up to $2.55 per gallon, about 10 cents higher than the national average price. Connecticut drivers bought 1.44 billion gallons of gasoline in 2013 to drive about 30.9 billion miles, a rate of about 21.5 miles per gallon compared with a national rate of 22.1.

8. Pennsylvania
> Price per gallon: $2.62
> Operable refineries, 2014: 4 (9th highest)
> Refining capacity (barrels per day): 596,000 (6th highest)
> Total state and federal tax per gallon: 68.9 cents (the highest)

While Pennsylvania voted in 2013 to eliminate its excise tax on gasoline and diesel, other state taxes and fees on motor fuels add more than 50 cents to gas prices per gallon in the state. Combined with the federal gas tax, Pennsylvania drivers pay nearly 70 cents per gallon in gas taxes, or 26.3% of the total average price. Often, high gas prices can be the result of low oil refinement in a state. This was not the case in Pennsylvania, where nearly 600,000 barrels of oil were refined per day in 2014, the sixth highest production rate in the country and up only slightly from 2013. Still, in-state oil refinement was likely unable to keep pace with the state’s gasoline consumption, as residents purchased more than 5 billion gallons of gasoline in 2013.

7. New York
> Price per gallon: $2.63
> Operable refineries, 2014: 0 (19th lowest)
> Refining capacity (barrels per day): – (20th lowest)
> Total state and federal tax per gallon: 63.49 cents (3rd highest)

New York has one of the highest costs of living in the nation. In addition to relatively expensive everyday goods, high rent and home prices, New York drivers pay an average of $2.63 per gallon of gas, the seventh highest gas price in the country. Total state gas taxes totalled 45.09 cents per gallon at the beginning of this year, the third highest gas tax rate in the nation. There were 411 New Yorkers per square mile on average in 2010, one of the higher population densities in the country. New York City, where the population is most concentrated, has an exceptionally strong public transportation system, which may alleviate the effects of high gas prices on commuters. Residents of New York, one of the nation’s most populous states, were among the largest consumers of gasoline, purchasing a total of nearly 5.4 billion gallons in 2013, the fourth highest figure nationwide.

6. Washington
> Price per gallon: $2.84
> Operable refineries, 2014: 5 (7th highest)
> Refining capacity (barrels per day): 631,700 (5th highest)
> Total state and federal tax per gallon: 55.90 cents (7th highest)

Washington drivers pay the sixth highest gasoline prices in the nation. Perhaps because of the relatively high gas prices, Washington drivers used about 20.9 miles per gallon in 2013, 5% below the national rate of 22.1 miles per gallon. Prices declined about 80 cents per gallon in the last year. Gasoline prices in the state peaked last July at just under $4.00 per gallon and plummeted all the way to $2.30 per gallon in January before creeping back up. The price of a gallon of gasoline in Washington increased by 23.5% since the beginning of the year compared with a national increase of 16.8%.

ALSO READ: 10 Disappearing Middle Class Jobs

5. Nevada
> Price per gallon: $2.88
> Operable refineries, 2014: 1 (24th highest)
> Refining capacity (barrels per day): 2,000 (21st lowest)
> Total state and federal tax per gallon: 51.55 cents (10th highest)

Since peaking last summer, gas prices across the nation have fallen by an average of $1.20 per gallon to $2.45. In Nevada, however, gas prices have dropped by only $1.00 to $2.88 per gallon, the fifth highest price in the country. Gas taxes are often one reason for high prices. As of March 2015, Nevada’s state gas taxes are among the highest in the country at 33.15 cents per gallon. High gas prices may dissuade people from driving in Nevada. Residents drove an estimated 24.6 billion miles on public roads in 2013, one of the lower mileages of any state. The high gas prices may also be the result of minimal oil refining capacity in the state. The only operating refinery in Nevada had an operating capacity of just 2,000 barrels per day in 2013, the smallest refinement capacity among states with refineries.

4. Oregon
> Price per gallon: $2.88
> Operable refineries, 2014: 0 (19th lowest)
> Refining capacity (barrels per day): – (20th lowest)
> Total state and federal tax per gallon: 49.47 cents (14th highest)

Oregon is one of several states with the highest gas prices that is located on or near the west coast. Gas prices in the region have skyrocketed recently, largely due to the recent ExxonMobil refinery explosion. The refinery provided a large share of the regional gas. Drivers in Oregon pay $2.88 per gallon, up more than 60 cents from the beginning of the year — a considerably larger increase than the increase across the nation. Despite the spike, gas prices are still far lower than they were one year ago when the average cost was $3.51 per gallon of regular gasoline. As in most states with relatively high gas prices, Oregon levies higher gasoline taxes than most of the country. Further, Oregon is the only state other than New Jersey where self-service gas stations are not permitted.

ALSO READ: Cities With the Highest (and Lowest) Unemployment Rates

3. Alaska
> Price per gallon: $2.90
> Operable refineries, 2014: 6 (4th highest)
> Refining capacity (barrels per day): 243,805 (15th highest)
> Total state and federal tax per gallon: 29.70 cents (the lowest)

Despite relatively low gasoline taxes and a relatively large number of operable refineries, Alaska has almost the highest gasoline prices in the country. Alaskans pay on average 45 cents per gallon more than the national average. According to a recent article in the Alaska Dispatch News, relatively high costs of doing business and a less competitive wholesale gas market in Alaska largely explain the state’s exceptionally high gas prices compared to the rest of the country. Taxes on the other hand, are very low, with total state and federal taxes on gasoline totalling less than 30 cents per gallon, the lowest nationwide. Low tax revenue may account in part for the similarly low investment state officials have committed to infrastructure. With 12.7% of Alaska roads classified as bad, only Hawaii had more of its roads in bad shape. In 2012, Alaska put aside just $93,989 per mile of state road for repair and maintenance, one of the lowest per mile appropriations in the country.

2. Hawaii
> Price per gallon: $3.13
> Operable refineries, 2014: 2 (17th highest)
> Refining capacity (barrels per day): 147,500 (21st highest)
> Total state and federal tax per gallon: 63.40 cents (4th highest)

Even without taxes, gas in Hawaii would be more expensive than in most states, likely due to the added challenges of transporting gasoline to the state. Perhaps as a result, the state has one of the highest costs of living in the country, of which oil and gas prices are a major component. In addition to a high overall cost of living, Hawaiian drivers must pay 45 cents per gallon of gas in state taxes, a higher tax than in all but three other states. The demands of the state’s economy may also drive gas prices higher. In 2013, nearly 4.5% of the state’s GDP came from the transportation and warehousing sector, which relies heavily on gas and is sensitive to high gas prices. Nationally, less than 3% of the GDP was attributed to the sector.

ALSO READ: The States Where the Rich are Getting Richer

1. California
> Price per gallon: $3.43
> Operable refineries, 2014: 18 (3rd highest)
> Refining capacity (barrels per day): 1,876,171 (3rd highest)
> Total state and federal tax per gallon: 63.79 cents (2nd highest)

California currently has the nation’s highest price of gas, at $3.43 per gallon. Prices have skyrocketed in the state recently, up by more than 80 cents per gallon from one month ago. California is home to 18 refineries, by far the most compared to other states with expensive gasoline. The cost of crude is the largest component of gas prices. And while close proximity to refining operations often helps lower gasoline prices, this has not been the case in California. The explosion at an ExxonMobil refinery located outside Los Angeles at the end of last month accounts for much of the recent price spikes in California and the surrounding region. To make matters worse, California gasoline must meet a range of specifications not required outside of the state. As a result, it has been relatively difficult for California’s gas sellers to make up for lost supply from the explosion by importing from other sources. Gas taxes are also especially high in the state. Drivers paid 45.39 cents per gallon in state taxes and fees as of the beginning of this year, the second highest state gas tax rate nationwide.