An unanticipated closure of an East Coast refinery sent prices soaring to a year-to-date high by mid-February. Gasoline prices have fluctuated since then, but have been trending slowly downward. Prices in some cities remain exceptionally high, however, at least 25 cents more than the national price. Gas in Honolulu as of earlier this week averaged $4.23 per gallon. These are the cities with the most expensive gas.
Click here to see the 10 cities
Americans are driving less and as newer, more fuel-efficient vehicles replace older ones in the country’s fleet, demand is also decreasing. The main reason that crude oil and gas prices remain high is uncertainty about the future availability of crude. Events in the Middle East, the source of more than a third of the world’s supply of crude, figure heavily in market prices for crude and eventually gasoline. The threat of military action in Syria has driven up crude and gas prices since late Monday, with West Texas Intermediate (WTI) crude for October delivery trading near $109 a barrel on Tuesday.
In the nine cities with the highest gas prices, four of the cities are on the East Coast, two are in California, and there is one each in Alaska, Hawaii, and Idaho. The concentration of cities on the East Coast is due to a variety of reasons, the most important of which is that Northeast refineries obtain most of their crude oil from non-U.S. sources, raising the cost of refined products and ultimately the price for consumers. Gregg Laskoski, senior petroleum analyst at GasBuddy.com points out, “for a long time the Northeast has had to rely on Brent crude oil, which has to come across the ocean from Europe.”
Many of these cities are also in states with much higher taxes driving up rates. Connecticut, California, Hawaii, and New York – where all but two of these cities are located — all have among the highest state taxes in the country. “There are regions of the country where it is almost a given that gas prices are going to be higher simply because taxes are higher,” explained Laskoski.
These are also among the most expensive cities in the country to to live in. As of the beginning of this year, New York City, Honolulu, and San Francisco, all of which have among the highest gas prices, had the highest overall cost of living. This is likely not a coincidence, explained Laskoski. “where you have affluent markets, you’re going to have retailers that are going to push their prices to a level that they think the market will bear.”
Using GasBuddy.com’s list of cities with high gas prices, 24/7 Wall St. reviewed the nine cities with the highest gas prices as of August 25. Those numbers are regularly updated, and may have changed since then. 24/7 Wall St. also reviewed city cost-of-living data from the Council for Community and Economic Research as of the first quarter of 2013. We also considered state gas prices, also as of August 25, from AAA’s daily fuel gauge report. Current and historical gas prices come from data at GasBuddy.com, and gas tax data comes from the quarterly review of state gas taxes from the American Petroleum Institute.
9. Boise, Idaho
> Gas price: $3.86
> Month ago: $3.80
> Year ago: $3.68
> State gasoline taxes: 25.0 cents per gallon
Idaho has no oil refineries and gasoline supplies arrive primarily by pipeline from Salt Lake City, Utah. That pushes the state’s average price to among the top nine in the country. Idaho’s state and local gasoline taxes rank 26th in the country. Boise, like much of the Rocky Mountain region, benefitted last year from gasoline refined from lower-cost crude oil that came from Canada and North Dakota. That price differential has been cut nearly in half (from about $43 a barrel late last year to around $23 in late May compared with WTI) as rail transport has enabled crude producers to get the crude to both the East and West Coasts.
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8. New Haven, Conn.
> Current gas price: $3.87
> Month ago: $3.99
> Year ago: $3.96
> State gasoline taxes: 49.3 cents per gallon
Of the nine cities on this list, three are located in Connecticut. On a statewide basis, gasoline is more expensive in Connecticut than in every state except Hawaii and Alaska, and the state also ranks third in total cost of living. Gasoline taxes are fourth-highest among the 50 states and, as elsewhere in the Northeast, prices are partially driven by the cost of more expensive Brent crude. Connecticut does not have any refineries, so all the state’s gasoline is imported, primarily by surface transportation.
7. Waterbury, Conn.
> Current gas price: $3.88
> Month ago: $3.97
> Year ago: $3.97
> State gasoline taxes: 49.3 per gallon
Another Connecticut city, Waterbury, makes the list. The price differences among the cities we’ve listed so far are small, just two cents a gallon separate the three. In Waterbury, the prices in Waterbury, however, vary considerably. In some parts of the city, prices are as high as $4.12 — and in others as low as $3.72. Waterbury is located roughly 20 miles north of New Haven. GasBuddy.com’s Laskoski also noted another contributor to Waterbury’s high prices is likely the higher cost of living in Connecticut.
6. New York, N.Y.
> Current gas price: $3.88
> Month ago: $3.99
> Year ago: $4.04
> State gasoline taxes: 49.8 cents per gallon
The cost of living in New York City is higher than anywhere else in the country. Statewide, gasoline taxes are the third-highest in the country. New York City itself does not charge a local gas tax, but various other local taxes raise the cost of doing business in the city and may be passed along to consumers in gas prices. New York is also a densely populated, congested city, and this may increase the costs of transporting gas, resulting in higher prices. Like Connecticut, the state has no refineries, but depends on those in New Jersey, Pennsylvania, the Gulf Coast via the Colonial Pipeline system, Canada, and Europe.
5. San Francisco, Calif.
> Current gas price: $3.92
> Month ago: $4.03
> Year ago: $4.22
> State gasoline taxes: 53.5 cents per gallon
Californians on average pay the highest gasoline taxes in the country. Much of the state’s crude oil comes from Alaska, and Alaska North Slope crude is priced at a premium of as much as $3.50 a barrel to WTI and $2 a barrel to Brent. More expensive crude and highest-in-the-nation taxes — combined with the the city’s extremely high cost of living — add up to San Francisco’s high gasoline prices.
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4. Anchorage, Alaska
> Current gas price: $3.94
> Month ago: $3.96
> Year ago: $3.81
> State gasoline taxes: 8.0 cents per gallon
Alaska’s gasoline tax is the lowest in the U.S. The state has six operating refineries but, as in San Francisco, the higher cost of crude is reflected in the price of gasoline. There are virtually no refined product pipelines in Alaska, so fuel moves mostly by tanker truck because rail transport is also limited. Anchorage sports one of the highest costs of living among all U.S. cities, largely the result of its isolation. Gas prices in the city range from $3.83 to a penny shy of $4.00.
3. Bridgeport, Conn.
> Current gas price: $3.95
> Month ago: $4.03
> Year ago: $3.99
> State gasoline taxes: 49.3 cents per gallon
Like other cities in Connecticut, Bridgeport’s gas prices are kept high by state taxes and the need to import the gasoline that state drivers consume. The city claims the distinction of being the most heavily taxed in the entire U.S., according to a report from tax preparation firm H&R Block. A family of three with an income of $50,000 pays 24.5% of that income in state and local taxes in the city, with property taxes taking the biggest bite — 84% of the total. Gas prices in Bridgeport range from as low as $3.67 to as high as $4.09 per gallon.
2. Santa Barbara, Calif.
> Current gas price: $3.97
> Month ago: $4.12
> Year ago: $4.22
> State gasoline taxes: 53.5 cents per gallon
This southern California city of Santa Barbara faces most of the same issues that drive up the cost of gasoline in San Francisco. State taxes are the highest in the country, at 53.5 cents per gallon. There are no pipelines to transport refined products directly to Santa Barbara, so the higher cost of surface transportation may account for the high gasoline price. Prices in Santa Barbara vary especially widely, from $3.44 at the low end to $4.53 in some places.
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1. Honolulu, Hawaii
> Current gas price: $4.23
> Month ago: $4.23
> Year ago: $4.23
> State gasoline taxes: 50.6 cents per gallon
Hawaii, like Alaska, pays for its isolation. Next to New York City, Honolulu claims the highest cost of living of any U.S. city. The state’s total gasoline taxes, at 50.6 cents per gallon, are second only to California’s. Honolulu itself collects a tax of 16.5 cents per gallon on gasoline, and the city council just rejected the new mayor’s request to raise that by a nickel. In the city, prices range from as little as $4.13 to as much as $4.35.
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