Gas Prices Still Differ From State to State Despite Nationwide Spikes

Motorists in the United States are feeling the pain at the pump as the country hit a new record high in average gas prices this week as President Joe Biden announced a ban on Russian oil, but some drivers are feeling more pain than others.

According to AAA, the national average gas price reached $4.252 on Wednesday. But while prices in California recorded the nation's highest numbers with a statewide average of $5.57 for a gallon of regular unleaded gas, Kansas managed the country's lowest rate of $3.792, edging out Oklahoma's average rate of $3.794 a gallon.

A number of factors play into why gas prices can vary widely from state to state, as well as from station to station within the same state. While state and local taxes play big roles, there are a number of other less-obvious reasons.

gas pumps
Gas prices vary from state to state for a variety of reasons. This undated stock photo shows a gas pump. Getty

Taxes account for about 40 percent of California's high gasoline prices. The state's gas tax is 51.1 cents, according to the Federation of Tax Administrators. However, Pennsylvania actually has the highest gas tax rates in the country at 57.6 cents.

Adding to California's high prices are regulatory laws for reducing greenhouse gas emissions, which are also in place in a few other states. With those costs, around $1.27 was added to the cost of a gallon of gas last month in California, according to a calculation by the Western States Petroleum Association.

The U.S. Energy Information Administration (EIA) noted on its website: "Gasoline prices vary over time and among states and regions. In addition to differences in state and local taxes, other factors contribute to regional differences in gasoline prices, including distance from supply, supply disruptions, and retail competition and operating cost."

States like Mississippi, Alabama, Texas and Louisiana have an advantage over other regions due to their proximity to many large refineries on the Gulf Coast. As the Federal Trade Commission (FTC) noted in a 2005 report, "the Gulf Coast supplies a large proportion of the gasoline sold in the U.S.," whereas the "East Coast produces some gasoline, but also relies heavily on deliveries from the Gulf Coast and, to a lesser extent, imports from Canada, the Caribbean, Europe and South America." Meanwhile, some states, especially Hawaii, are far away from all gas supplies, thus resulting in higher prices due to transportation costs to get fuel there.

Different types of oil can account for price disparities as well, and oils from refineries on the East and West coasts have historically been expensive. Refineries in the Gulf Coast, on the other hand, have tended to produce oil that's cheaper than in other parts of the country.

The time of year can also affect the price of gasoline, with gas costing more in the summer for consumers while typically going down in price during the winter months. Part of the reason for this is the demand for gas increases during warmer months when people travel more for vacations.

Gas companies also produce a more expensive "summer blend" of gasoline that does not evaporate as quickly in warmer temperatures and is designed to produce less smog. By contrast, winter blends are often made with cheaper ingredients.