Energy Business

Gas Is Over $4 In America, But $5 In This State

Gas prices surged above $4 per gallon of regular for the first time since 2008. This happened as crude oil prices surged above $100. The increase will likely continue, toward the all-time record of $4.10. As for the cause, Patrick De Haan, head of petroleum analysis for GasBuddy commented: “This is a milestone that was hard to imagine happening so quickly, but with bipartisan support of severe sanctions on Russia, is not exactly surprising – it is the cost of choking off Russia from energy revenue.” His new forecast for what Americans will spend on gas this year hit $568 billion, up from $408 billion last year.

Gas prices can be affected by factors beyond the price of crude. Refinery use can drive shortages. Sometimes refinery management shutters facilities for maintenance. Occasionally, an accident can close a refinery. Marathon Petroleum Corp’s 578,000 barrel-per-day Garyville, Louisiana location stopped operations on February 22, due to an explosion.

Whether a state is near or far from large refineries can also make prices vary. States near and around the Gulf of Mexico, its well and refineries tend to have lower prices.

Gas taxes also play a role, both those collected by the federal government and all of the states. One proposal floated by some members of Congress involves suspending these taxes to bring down consumer costs. This could save as much as $.50 a gallon.

The prices of gas, based on an average gallon of regular, have moved above $5 in California, which makes it the most expensive among all states. Yesterday, Gas Buddy put the California price at $5.27. About 12% of America’s population lives in California.

Gas taxes in California help make prices higher than the rest of the country. According to the American Petroleum Institute‘s gasoline report posted on January 1, California’s gas taxes total $.8655 per gallon. That compared to the national average of $.5709. The state with the lowest number is Alaska at $.3353.

Some officials want to temporarily cut the California tax. However, the effort may not go through. According to ABC10, “While Governor Gavin Newsom proposed suspending the gas tax to help with costs, not all Democrats are eager to jump on board.”

Click here to read States With the Highest Gas Taxes


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