Here’s Why Gas is So Expensive in Some U.S. States But Not Others

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Spiking gas prices have weighed on motorists in every state this year, making daily life more expensive in myriad ways. But the burden has not been evenly distributed.

Californians were paying well over $5 a gallon months before the national average reached it on June 11. In Chicago, the average is pushing $6 but remains nearly a dollar cheaper elsewhere in Illinois. Fuel costs in rural parts of the Southeast and Midwest lag far behind those of their coastal counterparts.

So why do gasoline costs differ so much from one area to the next? Economists attribute it to an array of forces related to supply chains, the local cost of doing business, taxes and environmental policy, among other factors.

Crude oil is a global commodity, whose prices are set by supply and demand. But it also has to be transported to a refinery, processed and then shipped to individual fuel stations, which have operating costs of their own. Each link in that chain is reflected in what consumers pay at the pump, and that cost varies significantly depending on the location.

The bulk of U.S. refining capacity is along the Gulf Coast, particularly Texas and Louisiana, said Pavel Molchanov, director and equity research analyst at Raymond James, an investment bank and financial services company. A gas station located far away from a refinery can expect a hefty markup, he says.

“Delivering gas in Texas is obviously cheaper because the refineries are right there,” Molchanov said. “In places where there are no refineries, the fuel needs to be delivered maybe thousands of miles, and that costs more.”

The East Coast, for example, benefits from a vast network of pipelines that carries gasoline and jet fuel; the largest is Colonial Pipeline, which stretches from Houston to New York. But that setup cannot be replicated on the West Coast because the Rocky Mountains prevent similar access to Gulf Coast refineries.

Taxes also play a key role: All motorists pay a federal gasoline tax of 18 cents a gallon, but states tack on their own levies, which generally are used to fund infrastructure projects, and they can vary significantly.

West Coast drivers pay some of the highest state fuel taxes in the country, according to the Federation of Tax Administrators. That comes to nearly 57 cents a gallon in California, 49 cents in Washington and 38 cents in Oregon.

But the highest state tax rate belongs to Pennsylvania, at 58 cents per gallon. The lowest can be found in Alaska, at about 9 cents.

As fuel prices have climbed, some states, including Florida, New York and Georgia, have paused their gasoline taxes for parts of 2022.

Clean energy regulations can increase costs at the state and local level. Regulations governing the mix of chemicals referred to as “gasoline” mean gas stations have to pay more in some states to serve cleaner-burning fuel.

California’s Air Resource Board, for example, maintains a raft of requirements applying to the specific formulation that gas producers and importers can sell in the state, applying strict rules to chemicals like benzene, formaldehyde and sulfur. As a result, the state imports a lot of Middle Eastern gas, according to GasBuddy’s head of petroleum analysis, Patrick De Haan.

“California is a petrol island, if you will,” De Haan says.

Regulations on so-called cleaner-burning gasoline, or CBG, also can come into play within individual states. Arizona’s retail compliance standards for gasoline place tighter restrictions on Phoenix and the surrounding area, for example, while Tucson and other parts of the state have less stringent requirements.

Gasoline in Maricopa County, where Phoenix is located, runs nearly $5.70 a gallon, on average. But it remains under $5 in neighboring Yuma and Pima Counties.

(c) 2022, The Washington Post · Aaron Gregg, Laris Karklis, Adrian Blanco 


  1. Quite amazing that the Washington Compost didn’t blame Putin this time. They actually said the truth, it must be an accident, that it’s a commodity and that’s a major part of the issue. Yes, taxes is also a major part of the issue.

    What they fail to say was that it’s the disastrous policies of the Biden administration as well as the Democrats that is doing this to our country. Gasoline began its trick northward shortly after the 2020 election if that’s what it was called. From the time Biden was immaculated guest started going up and up and up and up. Even before Putin, the Democrat party fall guy, The price of a gallon of gas had already gone up 50% under Joe Biden.

    If the president is really serious about the high gas prices, and I highly doubt he is considering he unfortunately doesn’t seem to know which way is left or right anymore, he would immediately revert back to the drill here drill now stance of the previous administration. He would allow for fracking, which was clearly safe. Drill here drill now! That’s the way out of this.


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