Special Report

States With the Highest Gas Prices

Gasoline prices have risen steadily in the past six weeks through March 18. There was an uptick in gas prices in 37 of the past 38 days, and gas is now more expensive than at any point in the past six months.

In a number of states, the price of gas is now more than $3.75 per gallon, versus $3.52 nationwide, with gas prices in several other states not far behind. In Hawaii, the price of gas is $4.17 per gallon. Here, as in a number of states, the high price of gas reflects the difficulties involved in transporting oil and refined products to the state. Based on data from AAA’s Daily Fuel Gauge Report, these are the 10 states with the highest average gasoline prices.

 

Click here to see the states with the highest gas prices

In an interview with 24/7 Wall St., Michael Green, public relations manager at AAA, said that seasonal factors played a major role in the recent run-up in gas prices. “Refinery maintenance, the switchover to summer blend gasoline, and more-recently rising demand,” have all played a role in the rise of gas prices, Green told 24/7 Wall St.

Differences in regional gas prices are in part the result of where a state is located. “The closer you are to a refinery, generally means you’ll pay less at the pump,” Green said. Hawaii may be the most notable example of this. Gas prices in the state are usually the highest in America, due in part to the costs of transporting gasoline there. Similarly, states in the Northeast often pay higher prices due to their distance from oil-producing and refining states.

Because of their location, many states often import more expensive oil from abroad. “Refineries along the West Coast and Northeast generally buy higher priced Brent crude oil from overseas,” Green said. Eventually, these higher prices are passed on to the consumer, who ends up paying more at the pump.

Taxes often affect the price of gasoline as well. Of the 10 states with the nation’s highest gas prices, all but two levy among the 10 highest gas taxes. Residents in California, New York, Connecticut and Hawaii pay the most in both gas prices and gas taxes. California charges drivers more than 52 cents per gallon in state taxes alone.

To determine the states with the highest gasoline prices, 24/7 Wall St. reviewed statewide average fuel prices as of March 18 from AAA’s Daily Fuel Gauge Report. We also reviewed the U.S. Energy Information Administration’s (EIA) 2013 Refinery Capacity Report, which breaks out production capacity and the number of operable refineries by state. Capacity figures cited are from January 2013 and reflect the number of barrels of oil that operating refineries can reasonably be expected to produce in a calendar day. Also from the EIA, we reviewed figures on total oil production by state for 2013. Finally, we looked at gas taxes per state from the American Petroleum Institute, which are current as of January 2014.

These are the states with the highest gas prices.

10. Pennsylvania
> Price per gallon: $3.64
> Barrels produced, 2013: 5.4 million (19th most)
> Refining capacity (barrels per day): 595,000 (6th most)
> Tax per gallon: 41.8 cents (5th highest)

At the start of 2013, Pennsylvania had four operating refineries capable of producing nearly 600,000 barrels per day. Despite this, the state has some of the highest gas prices in the nation, with gasoline running $3.64 a gallon in Pennsylvania, versus $3.52 a gallon nationwide. Limited access to cheap crude and high taxes may be factors contributing to the relatively high gas prices. As of January, Pennsylvania residents paid 41.8 cents per gallon in state taxes, on average, fifth highest nationwide. The exact amount state residents pay in taxes is determined by wholesale prices for liquid fuels.

9. Maine
> Price per gallon: $3.64
> Barrels produced, 2013: N/A
> Refining capacity (barrels per day): N/A
> Tax per gallon: 30.0 cents (19th highest)

Unlike most of the states where drivers pay the most for gas, Maine’s gasoline taxes are relatively in line with the rest of the nation. Likely contributing to the high gas prices in Maine is the state’s distance from much of the nation’s oil infrastructure. The United States has no operable refineries east of New Jersey, and many of the petroleum products that go to Maine are delivered either by boat or from across the border in Canada. In addition to gasoline, much of the population relies on fuel oil to heat their residences during the winter. The state is also “particularly vulnerable to distillate fuel oil shortages and price spikes,” according to the EIA.

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8. Indiana
> Price per gallon: $3.66
> Barrels produced, 2013: 2.4 million (23rd most)
> Refining capacity (barrels per day): 192,100 (16th most)
> Tax per gallon: 38.7 cents (8th highest)

Drivers in Indiana pay some of the nation’s highest gas taxes — amounting to 38.7 cents per gallon on average in state taxes alone as of January. Following the national trend, the state’s gas prices are lower than last year. Still, Indiana prices are among the highest in the nation, at $3.66. Indiana is home to BP’s Whiting Refinery, one of the largest in the nation. A critical part of the refinery is said to currently be undergoing maintenance for the next several weeks, which may in turn temporarily contribute to higher gas prices.

7. Michigan
> Price per gallon: $3.72
> Barrels produced, 2013: 7.8 million (16th most)
> Refining capacity (barrels per day): 120,000 (24th most)
> Tax per gallon: 39.1 cents (tied for 6th highest)

Gas prices in Michigan have improved slightly since reaching a high of $4.20 per gallon last year, but drivers in the state are still feeling the pain at the pump. The Marathon Oil Company Detroit Refinery became the state’s only refinery in 2005, when the Alma Refinery closed. Prices might have been even higher had the refinery not recently made changes that allow it to refine Canadian crude oil. Drivers are not helped by the fact that they must pay, on average, 39 cents per gallon in taxes, the sixth highest in the country.

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6. Illinois
> Price per gallon: $3.76
> Barrels produced, 2013: 9.5 million (15th most)
> Refining capacity (barrels per day): 930,100 (4th most)
> Tax per gallon: 39.1 cents (tied for 6th highest)

Illinois residents currently pay $3.76 per gallon of gas, with prices reaching more than $3.90 per gallon in the Chicago metro area. Gas prices in the state may be the result of several factors, including the state’s relatively high gasoline taxes. Drivers pay an extra 39.1 cents per gallon of gasoline in state taxes, more than all but a handful of other states in the country. Prices, too, may have risen due to maintenance work at BP’s Whiting, Indiana, refinery, which is located close to Chicago and is one of the nation’s largest refineries.

5. Connecticut
> Price per gallon: $3.77
> Barrels produced, 2013: N/A
> Refining capacity (barrels per day): N/A
> Tax per gallon: 49.3 cents (3rd highest)

Connecticut drivers pay 49.3 cents per gallon in state gas taxes, the third highest in the nation. One factor contributing to the state’s high gas prices is the fact that the state imports all of its gasoline from other states, or from abroad. Overall high consumer prices may also play a role. As of 2011, Connecticut was the sixth most expensive state in the nation, as measured by the Bureau of Economic Analysis (BEA). Of course, residents have the capacity to pay higher gas prices — Connecticut residents had a median household income of $67,276 in 2012, among the highest in the nation.

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4. New York
> Price per gallon: $3.78
> Barrels produced, 2013: 352,000 (26th most)
> Refining capacity (barrels per day): N/A
> Tax per gallon: 49.6 cents (2nd highest)

Like Connecticut, New York gas prices are driven in part by the state’s high taxes. Residents can expect to pay nearly 50 cents per gallon in taxes, more than in any state in the country except for California. Additionally, New York residents face some of the highest consumer prices in the country. In 2011, New York had the second highest price level of any state, behind only Hawaii, according to the BEA. Also helping to keep prices elevated is the sheer scale of the state’s demand for energy. Gasoline for New York is brought in from other states as well as imported from other countries. New York, in turn, distributes petroleum products to other states in the Northeast from New York Harbor.

3. Alaska
> Price per gallon: $3.84
> Barrels produced, 2013: 187.9 million (4th most)
> Refining capacity (barrels per day): 244,707 (14th most)
> Tax per gallon: 12.4 cents (the lowest)

Unlike other states with high gas prices, Alaska does not levy especially high gas taxes. As of the start of the year, residents paid just 12.4 cents per gallon in state taxes, the lowest of any state in America. Additionally, Alaska is a major producer of oil, with nearly 188 million barrels produced in 2013, more than all but three other states. However, Alaska’s high oil prices, and years of declining production, have likely contributed to high prices at the pump. While the state is a major producer of oil, it is only a relatively small refiner. Alaska ranks just 14th for overall refining capacity, and refiners often face high costs of operating in the state. These costs, in turn, may be passed on to consumers.

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2. California
> Price per gallon: $3.97
> Barrels produced, 2013: 199.4 million (3rd most)
> Refining capacity (barrels per day): 1.6 million (3rd most)
> Tax per gallon: 52.5 cents (the highest)

Several factors contribute to California’s volatile gas prices. While California was the third largest U.S. producer and refiner of oil in 2013, refiners still had to meet the state’s huge demand. Refineries in the state, therefore, operate at nearly full capacity at all times, which means that any problems can potentially cause huge supply disruptions and lead to jumps in prices. The state also has more stringent standards than the federal government for reformulating gasoline, which adds another layer of costs to the price of gas. This is independent of the taxes that hit consumers at the pump. California effectively charges more than 52 cents per gallon in state taxes, the most of any state in the nation.

1. Hawaii
> Price per gallon: $4.17
> Barrels produced, 2013: N/A
> Refining capacity (barrels per day): 147,500 (21st most)
> Tax per gallon: 49.1 cents (4th highest)

Hawaii customers pay $4.17 per gallon of gas, more than anywhere else in the country. This is actually down considerably from just last year, when the price of gas was $4.40 per gallon. Like in a number of other high-price states, gas taxes are especially high in Hawaii. On average, residents pay 49.1 cents per gallon, more than in all but three other states. Of course, Hawaii is further away from America’s oil production and refineries than anywhere else in the country. Its location leads to high prices for more than just gasoline. Without any hydrocarbon supplies of its own, Hawaii must import energy. With 70% of the state’s electricity generation powered by petroleum, electricity rates in the state are also extremely high. As of November, residents paid an average of 37.2 cents per kilowatt-hour of electricity, or more than double any other state.

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