A Wyoming resident would be surprised by the relatively higher gasoline prices if for whatever reason he happens to refill gasoline say in Alaska or Hawaii. Over the past decade, the glaring difference in the retail prices of gasoline in different states has been necessitated by a combination of several factors. In fact, the states of the U.S. may be classified into three categories in accordance with their various retail gasoline prices.
States with Cheaper Retail Gasoline Prices
The first category comprises of the states that boasts of the cheapest retail prices of gasoline. The regulars of this category include: Wyoming, Colorado, Montana, Georgia, South Carolina, Oklahoma, Missouri, Utah, Idaho Tennessee, Indiana, Texas, Florida, Alabama, Michigan and Louisiana in that order. The current retail price of gasoline in these states currently fall within the bracket of $2.90 to $3.15
Lower tax rate is a major contributing factor for the low gasoline retail prices in these states. For example, in South Carolina, the tax rate is set at just $ 0.35 per gallon which leaves a huge margin when compared with corresponding $ 0.66 taxed in California.
Another factor that contribute to such low prices is the low cost of refining oil into gasoline. Regulations that aim to curb pollution in some states like California make the refineries therein to incur greater cost of production than the corresponding refineries that are located in states without such rules like Texas and Louisiana.
States with High Retail Gasoline Prices
On the other hand, the following states have the highest retail prices of gasoline in the U.S.: Hawaii, Alaska, Oregon, Connecticut, Washington, California, West Virginia, Maine, Vermont, Rhode Island, District of Columbia, Minnesota, Pennsylvania, New York, North Dakota, Nevada and Nebraska. The retail price of gasoline in these states range between $3.8 to $3.25.
As opposed to the states in the first category, these states have much higher tax rates which make their retail gasoline prices to skyrocket. Moreover, most of these states sell gasoline that is sourced from neighboring states hence transportation cost escalates retail gasoline prices. A perfect example is Hawaii which has no sources of natural gas and whose gasoline is transported by shipping which is a rather expensive mode of transport as compared to pipping.
States with Moderate Retail Gasoline Prices
Somewhere in between the two initial categories are states that neither have too low nor too high retail prices of gasoline. They include: North Carolina, Wisconsin, Arizona, Massachusetts, Ohio, Delaware, New Hampshire, Iowa, Kentucky, Illinois, Maryland, South Dakota, Arkansas, New Mexico, Kansas, Mississippi and New Jersey. The retail price of gasoline in these states currently ranges between $3.15 to $3.25.
States that fall within this category have moderate tax rates (averagely $ 0.43). It is remarkable that these states are geographically located not too far from the gulf coast which is the heart of oil refinery in the U.S.
It must be noted that these categories are not cast on stone because gasoline prices keep changing. However, although the prices fluctuate from time to time, there are way higher chances that the states may alter their positions within their various category than there are chances of a state actually crossing over to another category.