Special Report

Ten States Where Gas Prices Are Plunging

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.