Gas Prices Surge Above $4 in This State, as Oil Rises

By Douglas A. McIntyre Published Sep 30, 10:30AM EDT

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Gas Prices Surge Above $4 in This State, as Oil Rises — © nielubieklonu / Getty Images

Crude oil prices have reached their highest level in three years. The price, at $76 a barrel, compares to a 52-week low of $34. Among the reasons are the production facilities in the Gulf of Mexico that have been shuttered due to hurricanes. Several oil analysts expect crude to rise above $80 before the end of the year.

Several factors contribute to gasoline prices. The largest, by far, is the price of oil. As oil has risen, gasoline prices recently topped $3.18 on average for a gallon of regular nationwide, according to the AAA. That is up from $2.18 a year ago. The increase is one primary reason consumer prices have risen and worry about inflation has become a central part of the discussion of risks to the economic recovery. The holiday shopping season is less than two months away, and gas prices could cripple discretionary income.

The price of an average gallon of regular has surged to $4.39 in California, based on state gasoline prices from GasBuddy. The number has an outsized effect on the U.S. economy, because California is home to about 12% of America’s population.

Three other factors move gas prices: state gas taxes, refinery capacity and the cost of transportation. Gas taxes vary substantially from state to state. The American Petroleum Institute puts the average motor fuel tax at $0.5659 among all states. The state with the highest figure is California at $0.8538, a main reason the cost per gallon there is so high. The state with the lowest level is Arkansas at $0.3338.
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For part of the year, most refineries shut down for repairs and upgrades. This can change the price of gasoline as well. Hurricane Ida closed many of the Gulf refineries, which caused a critical interruption to the fuel supply.

As for transportation costs, the state with the second-highest gas price is Hawaii at $4.03 a gallon. It is also almost certainly the state with the highest cost to bring in fuel from elsewhere.

Click here to see which states have the highest and lowest gas taxes.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.