March gasoline prices fell for the first time in 10 years. As of April 1, the price of gas had fallen in 29 of the previous 33 days. Nationally, gas costs 30 cents a gallon less than it did a year ago and 15 cents a gallon less than it did following the February run-up in prices. AAA predicts the average price of gas in 2013 will be lower than 2012’s average of $3.60 a gallon — the highest AAA has ever recorded.

There are some significant reasons for the price drop. First, Americans are driving less — about 2.7% less, according to Department of Transportation figures, or nearly 90 billion miles since reaching a peak of more than 3 trillion miles in November 2007. Second, older, less-fuel efficient cars are being replaced by new ones that get better gas mileage. Third, refineries are finishing up their spring maintenance and turnarounds a bit earlier this year, so production is ramping back up sooner.

Click here to see the 10 states where gas prices are plunging

However, the main reason that gas is cheaper now than it was a month ago is that crude oil prices have dropped. Several of the states on this list had the highest gas prices a year ago: Illinois (fourth most expensive), Washington (fifth), Oregon (sixth), Indiana (ninth) and Michigan (10th). As of Monday, only two are among the 10 most expensive: Illinois, at sixth, and Washington at eighth.

According to Michael Green from AAA:

This year we have also seen an increase in North American crude, whether it’s out of the Bakken or Eagle Ford, or out of Canada, and that’s certainly helped with oil prices in the United States. It’s affected West Texas Intermediate (WTI), but it’s also affected some of the other blends, such as Western Canadian Select (WCS), and there’s a Bakken blend price. So refineries are buying oil from different places, and that certainly helps lower their costs, having these lower prices.

Illinois is a major hub for Canadian crude oil, and the state’s refineries have access to crude that is currently $15 a barrel cheaper than WTI and nearly $30 a barrel cheaper than Brent. Washington receives the cheaper crude by rail. As AAA’s Green noted, “Whenever oil is less expensive, that certainly helps the cost of gasoline. If it costs refineries less to make it, they’re gonna sell it to you for less.”

The cheaper crude making its way to the Midwest and the Gulf States is traveling by pipelines where possible and by rail and truck where there are no pipelines. Railroads hauled 233,800 carloads of crude in 2012, up from 65,800 in 2011 and just 29,600 in 2010. The availability of lower priced crude to refineries in Washington, Indiana, Michigan and Virginia is directly attributable to rail transport.

It is very possible — some might even say very likely — that the highest pump prices for gasoline are behind us for this year. Most analysts do not see prices rising to February levels again this year, barring some shock to the system, such as major political turmoil in big oil producing regions like the Middle East or Africa, major shutdowns due to bad weather or some major accident. That is the good news. The better news is, there really is no bad news.

To identify the 10 states where gas prices are plunging, 24/7 Wall St. considered data for April 1, 2013, and April 1, 2012,from AAA’s Daily Fuel Gauge Report. Refinery capacity figures came from the U.S. Energy Information Administration (EIA) and are as of January 2012. We also considered figures from the EIA on daily crude oil production, which are current as of January 2013. Figures on 2011 median income came from the U.S. Census Bureau, while fourth quarter 2012 cost-of-living comparisons are based on data from the Missouri Economic Research and Information Center (MERIC). We also reviewed tax figures from the American Petroleum Institute. The effective tax rate given here is current as of January 2013, and combines each state’s excise tax and other state taxes and fees. The 18.4 cent per gallon federal surcharge was not included.

These are 10 states where gasoline 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.

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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.

5. Virginia
> 1-yr. change in gas prices: -9.1%
> Gas price, 4/1/2013: $3.55 (20th lowest)
> No. of refineries: 0
> Daily crude oil production: n/a

Virginia had among the nation’s lowest costs of transportation in the fourth quarter of 2012. Contributing to this was the difference in gas prices between the state and the rest of the nation, which has increased over the past year. A gallon of gas is now eight cents cheaper in Virginia than the U.S. average, versus just one cent cheaper 12 months ago. This makes gas extremely affordable in a state where the median income in 2011 was nearly $62,000, seventh highest in the nation and more than $11,000 above the median nationwide.

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4. Illinois
> 1-yr. change in gas prices: -9.1%
> Gas price, 4/1/2013: $3.85 (6th highest)
> No. of refineries: 4
> Daily crude oil production: 26,000 barrels (15th highest)

Despite falling by 39 cents in the past year, the average gallon of gas in Illinois still costs $3.85, one of the highest prices in the nation. The state is among the nation’s leading refiners, with a capacity of 918,000 barrels per day, trailing just Texas, Louisiana and California. Many of the refineries in Illinois have access to relatively inexpensive crude oil from Canada and North Dakota, which costs less than crude oil imported to the Gulf Coast of the United States. But while prices fell relative to the rest of the nation, little oil comes from Illinois, and the state charges a higher effective tax rate than all but four other states, at 39.1 cents per gallon.

3. Washington
> 1-yr. change in gas prices: -9.3%
> Gas price, 4/1/2013: $3.74 (8th highest)
> No. of refineries: 5
> Daily crude oil production: n/a

A year ago, Washington had one of the nation’s highest average gas prices, with a gallon of gas costing $4.12. But over the past 12 months, gas prices fell by more than nearly all other states. Early in 2013, gas prices in Washington actually fell below the U.S. average — particularly impressive since the state has one of the highest taxes in the nation. As of late 2012, refineries in the state began receiving large oil shipments by rail from North Dakota, where oil production in January 2013 was up 38% from the year before. This has made the state’s refineries less dependent on oil from Alaska and has helped drive down prices. Washington is one of the largest refiners of oil in the nation, with more than 630,000 barrels produced per day.

2. Oregon
> 1-yr. change in gas prices: -9.4%
> Gas price, 4/1/2013: $3.71 (11th highest)
> No. of refineries: 0
> Daily crude oil production: n/a

In the fourth quarter of 2012, Oregon was one of the nation’s more expensive states to live in, with the fourth highest cost of transportation. But this may change; gas prices have fallen by 39 cents over the past year, and the wide gap that existed between prices in Oregon and the United States as a whole has shrunk in recent months. Although there are no operating refineries in Oregon, there is a pipeline from neighboring Washington, which is the fifth largest oil refiner in the nation.

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1. Indiana
> 1-yr. change in gas prices: -11.6%
> Gas price, 4/1/2013: $3.61 (24th highest)
> No. of refineries: 2
> Daily crude oil production: 7,000 barrels (tied for 22nd highest)

No state experienced a larger decline in gas prices during the past year than Indiana. In the past year, gas prices fell by 47 cents per gallon — eight cents more than in any other state. Among the likely reasons for falling prices, the amount of crude oil imported from Canada to the Midwestern U.S. has risen dramatically in recent years. Oil from Canada is considerably cheaper than oil from the Gulf Coast, where much of the Midwest’s oil used to come from. While Indiana had just two operating refineries as of January 2012, it had the nation’s eighth highest daily refining capacity, at 363,500 barrels per day. Most of this was accounted for by a BP refinery in Whiting.

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