Energy Economy

5 States Still Have High Gas Prices

Gasoline pump
Source: Thinkstock
While the average cost of a gallon of regular gasoline in the United States has tumbled to $2.037 as of Saturday, there are still five states where the cost of a gallon of gas remains above $2.40. In one of those five states, a gallon of gas still costs more than $3.00.

The state with the highest price for gasoline is Hawaii, where a gallon of regular gasoline currently costs $3.276. State gasoline taxes total 45 cents a gallon, in addition to the 18.4-cent federal tax, for a total of 63.5 cents per gallon in taxes, among the highest in the country. Hawaii’s big problem, of course, is that it must import every drop of gasoline state residents use. That adds to transportation costs because ships cost more than pipelines, which is how much of the gasoline in the U.S. gets from refineries to local distributors.

The state with the next highest cost for gasoline is Alaska, where state fuel taxes are a mere 12.4 cents per gallon, the lowest among the 50 states and the District of Columbia. There are no operating refineries in Alaska, so the state exports its North Slope crude oil and imports gasoline. The really bad news for Alaska is that its North Slope production is declining fast and with it are going the payments to Alaska citizens that help to offset the high prices Alaskans pay for everything. A gallon of gas in Alaska costs $2.709 as of Saturday.

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Gasoline in California costs $2.465, and the state sports the third-highest gas price in the country. State taxes add 45.39 cents to the cost of a gallon of gas, the nation’s third-highest state tax level. California is essentially its own country when it comes to oil and gasoline. There is limited pipeline transportation from the oilfields in Texas and none from North Dakota. Alaska’s North Slope provides much of the crude for the state’s refineries but as those volumes decline crude gets to the state by rail (from Canada and North Dakota primarily) and tankers from Saudi Arabia, Ecuador and Iraq.

New York residents pay the fourth-highest gasoline prices in the country at $2.454 a gallon. The state’s fuel taxes add 45.09 cents per gallon to the cost of gasoline. There are no operating refineries in New York, which gets the majority of its gasoline from New Jersey and Pennsylvania refineries and some imports, primarily from the United Kingdom and the Netherlands. Operating expenses in New York are high, as they are in big cities everywhere, with rents and labor costs higher than in more remote parts of the country.

The fifth-highest priced average gallon of gasoline costs $2.429 in Washington, D.C. The District did try to levy a percentage tax in 2013 rather than the 23.5 cents per gallon tax it has had in effect for several years. Tying the fuel tax to the wholesale cost of gasoline would have caused the price of gasoline to fluctuate even more than it does now, so supporters proposed a ceiling and a floor, but to no avail.

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