$2 Gasoline Comes Back

By Douglas A. McIntyre Published Nov 30, 1:35PM EST

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$2 Gasoline Comes Back — © marinzolich / Getty Images

Gasoline prices have dropped nationwide to $3.25 for a gallon of regular. That was down from $3.49 a month ago. The forecast is that prices will continue to fall as oil prices drop. However, the nationwide average price is misleading. Gas prices vary from state to state. In one place in the country, gas has dropped to $2 a gallon. (Check out the price of gasoline through the decades.)

Oil, state taxes and proximity to refineries drive the differences in states’ gas prices. In Oklahoma, it is $2.68 on average, based on GasBuddy data. At the far end of the spectrum, it is $4.80 in California.

Oil prices are at $79 a barrel and falling, which benefits all states. The per-barrel price was $90 in September. Barring a major geopolitical blowup, oil supplies are plentiful.

Louisiana benefits from low gasoline taxes, which are currently $0.3841 a gallon, according to the American Petroleum Institute. That is against a national average of $0.5709. California’s number is $0.8655.

Proximity to refineries also benefits Louisiana drivers. The state is close to the large refineries south of Houston along the Gulf Coast. This also keeps gas prices low in Texas, Oklahoma and Alabama.

Just as gas prices vary from state to state, they also vary within states. GasBuddy shows the price of a gallon of regular in Monroe, La., as $2.00, which is close to that in several other places.

Why does Monroe have a price at such a low level? Refinery proximity helps. However, it may also be a promotion to draw in drivers. But why make less than necessary in terms of margin?

Gasoline prices in some parts of Louisiana are a mystery. However, prices in that state and others are falling, and $2 gas may become the rule and not the exception.

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.