States with the Cheapest Gas

Print Email

10. Iowa
> Price per gallon: $3.08
> Unemployment rate: 4.9% (8th lowest)
> Total state taxes: 22 cents per gallon (16th lowest)
> Number of refineries: 0

Local refining capacity often translates to lower fuel costs. However, Iowa is one of only three states with the lowest gas prices and no oil refineries. Gas prices in Iowa declined by 20 cents a gallon, or 6%, from a month ago, a larger decrease than in most other states. One explanation for the drop in the already low gas prices could be the introduction of more ethanol-blended fuel, which tends to be less expensive. In Des Moines, Iowa’s capital, gas prices are as low as $2.77 a gallon. In addition to fuel, consumer goods are also relatively inexpensive in Iowa. The cost of living in the state is one of the lowest in the country.

9. New Mexico
> Price per gallon: $3.07
> Unemployment rate: 6.8% (20th lowest)
> Total state taxes: 18.9 cents per gallon (8th lowest)
> Number of refineries: 2 (tied for 17th most)

The price of gasoline in New Mexico has fallen in the past year from $3.43 a gallon to $3.07 a gallon, a drop of more than 10% — one of the largest declines in the nation over that period. The state’s low gas taxes help keep gas prices low. New Mexico residents pay just 18.9 cents in taxes per gallon, more than 12 cents less than the U.S. average. New Mexico is also one of the leading states for oil production, at 272,000 barrels per day as of August. But perhaps most importantly, the state is located in near Texas, which leads the nation in both production activity and refining capacity.

ALSO READ: Cities with the Most Expensive Gas

8. South Carolina
> Price per gallon: $3.07
> Unemployment rate: 8.1% (13th highest)
> Total state taxes: 16.8 cents per gallon (3rd lowest)
> Number of refineries: 0

South Carolina’s low gas taxes are a major reason for the state’s consistent cheap gas prices. Residents pay just 16.8 cents in state and local taxes, less than all but two other states. Largely because of its low taxes, the state actually had the nation’s lowest gas prices at times in recent years. However, the state’s low gas taxes have left little funding for road repairs, The Augusta Chronicle noted in February, repairs that some residents believe the state desperately needs. The paper also noted that, based to one estimate, local drivers “pay an average of $265 each year fixing their vehicles because of poor road conditions.”

7. Mississippi
> Price per gallon: $3.05
> Unemployment rate: 8.5% (8th highest)
> Total state taxes: 18.8 cents per gallon (7th lowest)
> Number of refineries: 3 (tied for 14th most)

Mississippi residents pay less than 19 cents per gallon of gasoline in state taxes, considerably lower than the national average of 31.1 cents per gallon. Mississippi has among the largest refining capacities in the country — its three oil refineries can process 364,000 barrels of oil per day. The state will likely benefit from the recent completion of an underground pipeline running from Norco, La. — near the Gulf Coast — to southern Mississippi. The median household income in Mississippi was $37,095 in 2012, the lowest in the country.

ALSO READ: America’s Best-Selling Cars

6. Louisiana
> Price per gallon: $3.03
> Unemployment rate: 7.0% (22nd lowest)
> Total state taxes: 20 cents per gallon (tied for 11th lowest)
> Number of refineries: 19 (2nd most)

Louisiana residents benefit from the state’s critical role in the oil industry. The state can process just over 200,000 barrels of oil per day, more than all but six other states. Its proximity to the nation’s two largest sources of oil production — Texas and offshore in the Gulf of Mexico — helps supply its refineries with crude. The state has 19 refineries and a daily refining capacity of more than 3 million barrels per day. The state is also home to the nation’s only offshore oil port, called the LOOP. The port allows tankers, which cannot reach shore, to offload their oil.