Gas Price Tumbles Toward $1

Iran sanctions have been lifted which will wash the world with more oil. By some estimates, the country can export 500,000 barrels a day. The increase in global supply begins just as the lowest U.S. gas prices for a gallon of regular hover above $1.30 in some part of the country. The current national average is $1.90. As crude collapses toward $25, gas prices are on their way down, again.

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In several states, the average price for a gallon of regular gas has dropped below $1.70 and according to GasBuddy, prices in these states continue to drop. Among them are Oklahoma at $1.57, Missouri at $1.63, Alabama at $1.66, South Carolina at $1.66, Arkansas at $1.66, Kansas at $1.67, and Tennessee and Texas, and Missouri at $1.68.

The list of state with low gas prices show two things which affect prices other than the price of crude. The first is proximity to refineries. In the case of Texas and adjoining states, the refineries are the huge ones south of Houston on the Gulf of Mexico. These, in turn, are close to the deep water supply of the Gulf and the oil fields of Texas. South Carolina also has several large refineries.

On the other side of the coin, states far from refineries tend to have the highest gas prices in the nation. This include Hawaii at $2.65 and Alaska at $2.41.

The other primary factor in gas prices is state and federal taxes and levies. According to the American Petroleum Institute, the national average tax per gallon is $.48. However, the figure in South Carolina is $.352, in Oklahoma $.354, in Missouri $.357, and $.384 in Texas. There have been a number of calls to raise gas taxes as a means to help state governments pay for road repairs which they would otherwise struggle to do because of budget restraints. As this point, there are no serious threats to a change in theses state taxes, but that could change if gas prices continue to fall

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There is no major reason to believe gas prices will not continue to press down, and in some cases to $1 a gallon