In this article, we are going to discuss the 20 states with the highest gas prices in the US. You can skip our detailed analysis of the global oil and gas market, the reason why gas is so cheap in America, and steps taken by major oil companies to achieve net zero by 2050, and go directly to 5 States With the Highest Gas Prices in the US.
The 19th century was a period of great change in America. The iron and steel industry spawned new construction materials, the railroads connected the country, and the discovery of oil provided a new source of fuel. A paradigm shift took place in the American oil industry in 1859, at the Drake Well in western Pennsylvania, when George Bissell and Edwin Drake discovered that it was possible to get oil from the ground by drilling using a salt drill. The famed Pennsylvania oil rush that ensued following this revelation forever changed the perception of oil and its sources, thus creating a bustling oil industry that would later become a key element of American industrialization.
Global Oil and Gas Market:
As we mentioned in our article – 20 Countries with the Cheapest Gas Prices – the global oil and gas market was valued at $6.99 trillion in 2022, and is expected to grow to $8.67 trillion in 2027, with a CAGR of 4.4% during the forecast period. The largest region in the global oil and gas market share is Asia Pacific, with North America coming in second.
The primary factors driving the growth of the industry include the rising demand for oil and gas, growing competition in the industry, financial capital, and public scrutiny. Furthermore, the rising oil and gas exploration activities and the increase in prices globally are also anticipated to drive the industry's growth.
Why Gas is so Cheap in the U.S.:
As a general rule, richer countries have higher gas prices, while the prices in poorer countries or countries that produce and export oil are significantly lower. However, the U.S. is an exception to this rule and has surprisingly low gas prices, despite being among the Richest Countries in the World. The principal reason for this is that gas taxes have always been exceptionally low in America. The federal gas tax was first charged in 1932 at 1 cent per gallon and is now at 18.4 cents a gallon, but this tax has remained unchanged since 1993.
Moreover, America is the world’s leading producer of oil, accounting for 14.7% of the overall world crude production in 2022. The country also became a net exporter of petroleum products in 2020, five years after Congress lifted a decades-long ban on oil exports. Having the luxury of local production means that oil and gas are readily accessible and affordable for mass distribution. Every year, the indigenous production of oil and gas helps save American consumers an estimated $203 billion, or $2,500 for each family of four.
As of November 8th 2023, the average price of gas in the United States stands at $3.405 per gallon, 32% below the all-time-high average gas price of $5.02 per gallon recorded in June 2022. Because of the large number of refineries present, Texas is the state with the cheapest gas, at only $2.871 per gallon.
Oil Majors Going Green:
As climate catastrophes continue to escalate, the urgency to reach net zero emissions is becoming more critical than ever. As a result, following the roadmap of the International Energy Agency, a growing number of oil and gas companies have committed to achieving net zero by 2050.
Among these key players is also The Exxon Mobil Corporation (NYSE:XOM) – the largest oil producer in the U.S. – which announced its goal last year to cut greenhouse gas emissions at its oil and gas operations to net zero by 2050, as it responds to investor pressure to clean up its business in the face of climate change. The oil giant said that it would eliminate the routine flaring of natural gas and methane leaks from its facilities and use renewables to power operations. Moreover, the Texas-based company is also investing $17 billion over a six-year span through 2027 in lower carbon emissions technologies such as carbon capture and sequestration, and hydrogen.
In fact, The Exxon Mobil Corporation (NYSE:XOM) has already taken significant steps to minimize its carbon footprint over the last few years, including evaluating the potential impact of its emissions to the communities where it operates. From 2016 to 2021, the total reportable emissions of volatile organic compounds, sulfur oxides, and nitrogen oxides decreased by approximately 24% at operated assets. The company also recycled nearly 100 million barrels of water in 2021, which enabled it to offset almost half of its water needs for fracking operations.
Similarly, in 2021, the Chevron Corporation (NYSE:CVX) also set the ambitious target to cut operational emissions to net zero by 2050, and has already implemented various measures to reduce its carbon emissions, including investing in blue and green hydrogen, carbon capture and sequestration, offsets, geothermal and nuclear energy, and restoring coastal and marine habitats to ensure they continue to draw CO2 from the air. The company has pledged to invest $10 billion by 2028 to reduce its carbon footprint.
Chevron Corporation (NYSE:CVX) believes that implementing a global carbon pricing system is the key incentive for driving low-carbon investments and scaling up energy transition technologies. The idea of taxing carbon emissions through a ‘cap-and-trade’ system is widely supported in some major markets like Europe and the U.K., but remains a political controversy in others, notably the United States. Chevron’s commitment to utilizing existing and emerging energy solutions and services demonstrates its dedication to mitigating greenhouse gas emissions and contributing to a more sustainable future.
With that said, here are the States with the Highest Gas Prices in America.
20 States With the Highest Gas Prices in the US
Methodology:
To collect data for this article, we have referred to AAA, looking for the states with the highest gas prices. We have also referred to the Energy Information Administration to collect information about the crude oil and gas reserves in several states. The following states have been ranked by their gas prices as of November 8th 2023.
The Ocean State has no crude oil reserves of its own and does not produce or refine petroleum, but the Port of Providence is a key hub for the distribution of petroleum products to southern New England.
It was announced earlier this year that Rhode Island is joining a wave of states that are following California’s lead to phase out sales of new gasoline-powered cars by 2035 in a bid to reduce air pollution and combat climate change.
19. Wyoming
Price of Gas per Gallon: $3.474
According to the University of Wyoming, a major reason why gas prices tend to be high in the Equality State is that there are fewer gas stations in most areas competing against one another, and so with less intense competition there is less incentive to undercut your competitors and begin a price war.
Wyoming was the eighth-largest crude oil-producing state in the nation in 2022, accounting for 2% of U.S. total crude oil output.
18. Maine
Price of Gas per Gallon: $3.485
Gas prices are higher in the northeast compared to other regions mainly because there are no refineries and the rural landscape means that there's a lack of competition, so stations are under less pressure to lower prices.
Maine is counted among the states with the most expensive gasin America.
17. Connecticut
Price of Gas per Gallon: $3.495
Due to its very limited reserves, there is neither any oil or gas activity in Connecticut, nor any operating petroleum refineries. Connecticut has a second tax that affects the price of gasoline, which was not suspended or discounted this past year. The Constitution State imposes an 8.1% wholesale tax when fuel is sold to local gasoline stations. A state-approved surcharge effectively boosts that rate to 8.81%, and stations routinely build the cost of that tax into the retail price they charge to motorists.
16. Massachusetts
Price of Gas per Gallon: $3.502
In 2020, The Massachusetts House of Representatives approved a major tax bill to generate more than half a billion dollars for transportation infrastructure by increasing taxes or fees on gasoline, corporations, ride-hailing services, and vehicle purchases by rental car companies. As a result, the Bay State's 24-cents-per-gallon gasoline and diesel taxes increased by 5 cents and 9 cents, respectively.
15. Illinois
Price of Gas per Gallon: $3.542
Illinois is the state with the second highest gas tax in America, at a staggering 66.5 cents per gallon. The Prairie State has multiple layers of gas taxes – the motor fuel excise tax, a prepaid sales tax, and underground environmental fees. That’s all before the federal tax and local taxes added by municipalities.
The annual inflation-based increase in the state's gas tax goes into effect on the 1st of July every year because of the Rebuild Illinois infrastructure bill, which passed the General Assembly in 2019.
Illinois is counted among the Top 15 States with the Highest Price of Gas.
14. Montana
Price of Gas per Gallon: $3.55
Montana is a small market, so the state’s four refineries don't have any competition even amongst each other and can jack up prices on local retailers. Transportation is another big factor that contributes to the high cost of gas, as everything is a little more spread out in the Treasure State.
13. Vermont
Price of Gas per Gallon: $3.572
Vermont has no crude oil reserves or production, nor does it have any petroleum refineries. Although there are no petroleum product pipelines in the state, there is a petroleum product terminal in the Burlington area.
In 2012, Vermont’s governor signed a bill making it the first U.S. state to ban fracking, the controversial practice to extract natural gas from the ground.
Vermont sits among the states with the costliest gas.
12. Utah
Price of Gas per Gallon: $3.604
Utah produces a significant amount of crude oil, primarily from the Uintah Basin in the eastern part of the state. The Beehive State has the fourth-highest number of oil and natural gas leases on federal lands, after Wyoming, New Mexico, and Colorado.
While current Utah gas prices are down dramatically from the state’s all-time high of $5.26 per gallon reached last July, experts say that supply side problems are skewing the market, causing a rise in prices.
11. District of Columbia
Price of Gas per Gallon: $3.612
The District of Columbia has no crude oil reserves or refineries, and consumes less total petroleum and has lower petroleum use per capita than any state.
In December 2017, Washington D.C. passed the strongest climate policy in the country. The Clean Energy DC Omnibus Amendment Act of 2018, or ‘Clean Energy DC Act’, is a climate solution that will result in less pollution, more investment into energy efficiency solutions, and a faster transition to clean, renewable energy sources.
10. Pennsylvania
Price of Gas per Gallon: $3.648
It's no secret that gas prices are surprisingly high in Pennsylvania, especially when five of the six neighboring states have cheaper gas. This is primarily because of the state's gas tax, which currently stands at $0.576 per gallon.
In January, Pennsylvania's State Senate passed a bill to cut the state's gas tax, one of the nation's highest. Senate Bill 35, which was approved by the Transportation Committee, would stop the automatic gas tax increase for 2023 and permanently set the wholesale price of gasoline at $2.99 per gallon. The Transportation Committee also passed a bill that dedicates gas tax revenues to road and bridge safety projects.
Pennsylvania ranks among the Top 10 states with the highest gas prices.
9. New York
Price of Gas per Gallon: $3.692
The indigenous oil and gas sector contributes half a billion dollars annually to New York’s economy. Still, the Empire State produces only a small amount of its required natural gas and crude oil, and as a result, is dependent on energy supplies from out of state to meet about three-fourths of its needs.
Fuel prices are generally higher in New York because of the state's tax structure, and without a local refinery, delivery costs are also higher.
8. Idaho
Price of Gas per Gallon: $3.814
Over the last decade, new production of oil, natural gas, and liquid condensate in the Payette Basin caused Idaho to become the 31st state in the country to produce hydrocarbons.
Although gas prices have fallen by almost 6.2% in the Gem State since a month ago, when they stood at $4.066, it still sits among the states with the most expensive gas.
7. Arizona
Price of Gas per Gallon: $3.822
There are no oil refineries in the Grand Canyon State, so almost all of its gasoline is imported from California, via the ‘West Line’, and Texas, via the ‘East Line’. Arizona also requires a particular oil blend of gasoline to meet its air quality regulations, which results in more expensive gas.
6. Alaska
Price of Gas per Gallon: $4.138
While Alaska’s central region depends on the local Kenai Refinery for its petroleum needs, the state’s southeast is largely supplied by US-flagged barges from Marathon’s refinery in Washington or the Burnaby Refinery in British Columbia.
Although gas is expensive all over The Last Frontier, the smaller communities that don’t have much volume, particularly ones where the fuel has to be barged or flown in, always pay substantially more than Anchorage.
Alaska ranks 6th in our list of States with the Highest Gas Prices Today.
