Special Report

Ten States Where Gas Prices Are Plunging

10. Arkansas
> 1-yr. change in gas prices: -8.8%
> Gas price, 4/1/2013: $3.44 (5th lowest)
> No. of refineries: 2
> Daily crude oil production: 18,000 barrels (17th highest)

Over the past year, Arkansas gasoline prices have fallen from an average of $3.77 per gallon to just $3.44. This has made Arkansas the fifth cheapest state for gas buyers, up from 12th the year before. The low cost of filling a tank also helps drive down the price of transportation, which was the fourth lowest in the nation during the final quarter of 2012, according to MERIC. Lower gas prices help people in Arkansas save money; this is especially important in a state where the median household income was among the nation’s lowest in 2011, at $38,758. Arkansas only has two refineries, with a total refining capacity of just 90,500 barrels a day as of January 2012, the fifth lowest among the 30 states with refining facilities. The likely reason for falling prices is that the state is so close to Louisiana and gets its refined products primarily by cheaper pipeline transportation.

Also Read: Nine Cities Where Renting Makes No Sense

9. Louisiana
> 1-yr. change in gas prices: -8.8%
> Gas price, 4/1/2013: $3.47 (10th lowest)
> No. of refineries: 18
> Daily crude oil production: 195,000 barrels (7th highest)

Louisiana is one of the nation’s leading oil producers. In January, the state produced 195,000 barrels per day, more than all but six other states. As of January 2012, Louisiana had 18 operating refineries, more than any state except Texas. Also helping consumers: In March, prices for some types of crude oil coming from the Gulf Coast declined relative to the WTI benchmark price. The state additionally has one of the nation’s least-burdensome gasoline tax frameworks; residents pay just 20 cents in state taxes per gallon, while the average consumer nationwide pays more than 30 cents in state taxes per gallon.

8. Tennessee
> 1-yr. change in gas prices: -9.0%
> Gas price, 4/1/2013: $3.42 (4th lowest)
> No. of refineries: 1
> Daily crude oil production: 1,000 barrels (tied for 26th highest)

Tennessee is one of the nation’s least-expensive states in which to live. Among the reasons why, it is the third cheapest state for transportation, in part due to low gas prices. On April 1, a gallon of gas in Tennessee cost just $3.42, less than all but Wyoming, Montana and South Carolina. On the same date in 2012, 10 states had cheaper gas than Tennessee. Such price declines at the pump are especially important in Tennessee, where the median household income was nearly $10,000 below the U.S. median. Tennessee has just one refinery, with a capacity of 180,000 barrels a day. Like Arkansas, proximity to Louisiana refineries is probably a key reason for low gas prices, together with connections to three major pipeline systems.

7. Georgia
> 1-yr. change in gas prices: -9.0%
> Gas price, 4/1/2013: $3.50 (15th lowest)
> No. of refineries: 0
> Daily crude oil production: n/a

Although nearly a cent lower than in 2012, and nearly two cents below the U.S. average of 30.4 cents per gallon, Georgia residents still pay a higher effective tax rate than Americans in 30 other states. Despite this, the average gallon of gas in Georgia costs $3.50, in the bottom third of all states. Prices also fell considerably relative to the rest of the nation in the past 12 months, declining 9%, versus 7.4% across the United States. Although no oil is produced or refined in the state, the Plantation Pipeline — one of the nations largest, transporting 600,000 barrels of gasoline and other fuels every day — runs through Georgia on its way from Louisiana to Washington, D.C.

6. Michigan
> 1-yr. change in gas prices: -9.1%
> Gas price, 4/1/2013: $3.68 (15th highest)
> No. of refineries: 1
> Daily crude oil production: 22,000 barrels (16th highest)

Over the past 12 months, the price of gas in Michigan has fallen from an average of $4.05 per gallon to $3.68. Additionally, while Michigan prices are still higher than the nationwide average, the gap has shrunk from 13 cents to just five cents. But this may not last for long: Governor Rick Snyder has called for a major gas tax hike as part of an initiative to raise roughly $1.2 billion to fix and improve the state’s roads. According to the American Petroleum Institute, as of January, Michigan already had one of the nation’s highest effective tax rates on gas, at 38.7 cents per gallon. The state has only one refinery, with a capacity of 106,000 barrels per day. Supplies come primarily from Indiana and Illinois.