Will Local Taxation Drive Gasoline Above $5.00 per Gallon as a Norm?

The news flow on the price of gasoline is rather concerning. 24/7 Wall St. just took a look at the states that have the highest gasoline prices in America. After personally paying about $99 at the pump this weekend, I wanted to see which cities were bilking their citizens the most. As expected, major metros in California led the list even though Hawaii beat California on the list of states.

Weekend news reports on the radio talked about gas prices nearing $5.00 per gallon again in some areas in California and elsewhere. GasBuddy.com confirms this in some of the highest-cost major metros. Gasoline’s average price is up more than 30 straight days now and the summer driving season is still a ways off while two refineries in the nation are closed for maintenance or switching.

This is coming at the same time as most of America is getting to absorb the end of the payroll tax holiday. Hawaii was higher than California by state, but almost everything is more expensive in Hawaii. California is the real leader in high gasoline prices as 8 of the top 10 cities in America were located in California. California even had 15 of the top 20 cities in America on the list for those with the highest gasoline prices. California was listed as the sixth highest state in our survey of states that tax people the most, but this has likely now changed and California had the highest tax on gas at the time with a tax of 46.6 cents per gallon.

What consumers need to understand is that this is not just the oil companies nor just the refineries bilking them. When you see crazy gasoline prices persisting over and over and when oil is not above $100 per barrel, you can generally blame the cities, counties, or state because the federal taxes and fees are generally fixed. GasBuddy.com showed these five cities as being in the top twenty which are not in California:

• 7) Honolulu, Hawaii
• 10) Chicago, Illinois
• 15) New York, New York
• 17) Bridgeport, Connecticut
• 18) Long Island, NY

Is it fair to ask how much longer California can keep getting away with its taxation efforts. Higher gas prices around the nation from one location to the next are dictated mainly by two things: the cost of getting the gas to the gas station and taxation at the city, county, and state level. California is already among the highest states with taxes, so it is of little surprise to see that the state would bilk its citizens on this too. We just cannot help but wonder at what point people will determine that they cannot afford to live there much longer.

Oh well, maybe this is just a part of the New Normal. And for all the citizens of California, get ready for the breathing tax (not really, but it almost looks like it). The good news is probably counterintuitive. If gasoline is rising for more than 30 days and if the news flow is increasing on it, hopefully that is marking a top.

Below is the copy of the list from GasBuddy.com showing the twenty cities with the highest average gasoline prices.