U.S. gasoline prices have fluctuated between $3.40 and $3.60 for the past few months. As of Tuesday, the average fuel price nationwide was $3.63 per gallon, up from $3.48 per gallon a week ago. This recent spike has some drivers wondering if the price of gas will reach $4.00 by the end of the summer.
In some states, the price of gas is already above $4.00, and others are very close to crossing that mark. Gas prices in nine states were at least $3.80 a gallon as of Tuesday. In some cases, prices are higher because of the difficulty of transporting oil there. In other cases, high gas taxes are the culprit. Based on AAA’s Daily Fuel Gauge Report, which monitors gas prices nationwide, these are the states with the most expensive gas.
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Gas prices increased nearly 5% in the past week as the price of crude oil has risen over $100 per barrel. Crude prices have shot up partially as a result of the political unrest in Egypt. While the country is not a major producer, there is concern that serious violence could result in the Suez Canal -- an important route for oil shipping -- being closed off. The effects of investors unwinding speculative trades in oil also may be driving prices up.
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When it comes to high gas prices in some states, one consideration is where the gas is coming from. Some states with high gas prices, such as New York and Connecticut for example, have to transport in a large portion of their refined gasoline from far away. Connecticut, which has no operating refineries of its own, has to import all of its fuel. California, which also has among the most expensive gas, still imports a great deal of refined fuel, despite the fact that it has refineries. Transportation is mostly via tanker, which can be expensive.
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The price at the pump is often heavily influenced by the amount tacked on by the state’s gas tax. Of the nine states with the highest gas prices, seven have among the 10 highest gas taxes in the country. This includes California, Hawaii, New York, Connecticut and Michigan, which have the highest total taxes in the nation -- in that order. California’s total state and federal gas tax amounts to 71.9 cents per gallon, higher than the national average of 49.5 cents.
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To find the states with the highest gas prices, 24/7 Wall St. reviewed average fuel prices as of July 16 from AAA’s Daily Fuel Gauge Report. We also reviewed the U.S. Energy Information Administration’s 2013 Refinery Capacity Report, which breaks out production capacity and the number of operable refineries by state. Capacity figures cited reflect the number of barrels of oil that can be produced at operable refineries in a calendar date within a state. Finally, we looked at gas taxes per state from the American Petroleum Institute.
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These are the nine states with the most expensive gas.
9. New York
> Average gas price: $3.86
> 1-yr. price increase: 18 cents (14th smallest)
> Taxes per gallon: 68.2 cents (3rd highest)
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Gasoline typically sells at a premium in New York relative to the rest of the nation, most likely because of the state's high gas taxes. The state's gas tax of 68.2 cents per gallon is higher than all but two other states and well above the 49.5 cent average across the nation. However, the difference between the average gas price nationwide and in New York has shrunk slightly in the past year, from about 28 cents a gallon a year ago to about 22 cents a gallon as of mid-July.
8. Oregon
> Average gas price: $3.86
> 1-yr. price increase: 32 cents (4th largest)
> Taxes per gallon: 49.5 cents (19th highest)
The $3.86 a gallon average cost of unleaded fuel in Oregon is up 32 cents compared to the same time in 2012. The state’s gas prices have not always been higher than the national average. In the first two months of 2013, average gas prices in the state were right around or even slightly lower than the national average, while gas prices are now 22 cents higher than the national average. There are no active oil refineries in the state, and most of the oil is coming in from Washington, potentially resulting in higher gas prices because of the cost of transportation.
7. Washington
> Average gas price: $3.89
> 1-yr. price increase: 30 cents (6th largest)
> Taxes per gallon: 55.9 cents (9th highest)
Early in 2013, the average gas price in Washington briefly fell below the national average price. However, the summer months have been especially expensive for Washington drivers in 2013, and the difference in gas prices between Washington and the country as a whole has widened from 21 cents last month to 25 cents as of July 16. Washington is a major oil refiner, ranking fifth largest in capacity as measured by barrels per day. However, most of the oil it refines comes from overseas or distant states. As a result, transportation costs are a major portion of the price of gas in the state. Taxes are also burdensome for many drivers, totaling 55.9 cents per gallon, among the highest in the nation.
6. Michigan
> Average gas price: $3.89
> 1-yr. price increase: 34 cents (3rd largest)
> Taxes per gallon: 57.9 cents (5th highest)
Michigan’s gas prices have shot up 32 cents in the past week. Prices in Michigan spiked when a BP refinery in Whiting, Indiana, closed. The refinery has since been fixed and reopened, but prices have not trickled down yet. The state has just one oil refinery, which produces 120,000 barrels of oil per day. Michigan's gas taxes also are higher than most states. Drivers fueling up in Michigan pay 57.9 cents a gallon in taxes, higher than all but four other states. Overall, both utility and transportation costs in the state are higher than the country as a whole.
5. Illinois
> Average gas price: $3.93
> 1-yr. price increase: 36 cents (2nd largest)
> Taxes per gallon: 57.5 cents (6th highest)
Illinois gas prices have been especially volatile in the past year. While at the beginning of the year prices were roughly in line with the national average, the spread between the state and national prices has since widened. One month ago, a gallon of regular in Illinois cost $3.89, or about 28 cents above the national price of $3.61. This wide gap has continued so far through July, with the national price of gas up to $3.64, and $3.93 in Illinois. Recently completed repairs at BP’s refinery in Whiting, Indiana, a major gas producer for the Chicago metro area, have yet to result in lower gas prices.
4. Connecticut
> Average gas price: $3.97
> 1-yr. price increase: 25 cents (15th largest)
> Taxes per gallon: 67.7 cents (4th highest)
The $3.97 a gallon average price of gas in Connecticut is 25 cents higher than it was a year ago. Overall, the state’s gas prices in the past year have fluctuated in a similar manner to the country as a whole. Drivers filling up their tanks in the state have to pay 67.7 cents a gallon in taxes and fees, more than all but three other states. Like the rest of New England, there are no refineries in the state. Fortunately, incomes are also higher than in nearly any other state. The median household income in Connecticut was more than $15,000 higher than the national median in 2011.
3. California
> Average gas price: $4.02
> 1-yr. price increase: 31 cents (5th largest)
> Taxes per gallon: 71.9 cents (the highest)
California does not suffer from any lack of supply, with oil coming to the state from Alaska and abroad. The state itself is home to potentially sizeable oil deposits as well, and few other states can match California’s refining capacity. The state has the ability to produce 1.6 million barrels per day from 16 refineries, both third highest behind Louisiana and Texas. However, a gallon of gas still costs roughly 38 cents more in California than it does nationwide, likely pushed up by the 71.9 cents per gallon residents pay in gas taxes and fees, the most of any state.
2. Alaska
> Average gas price: $4.06
> 1-yr. price increase: 4 cents (2nd smallest)
> Taxes per gallon: 26.4 cents (the lowest)
Gas prices in Alaska average $4.06 a gallon, up four cents from the same time in 2012. In that time, prices have risen as high as $4.25 and fallen as low as $3.66. Alaska is the second-most expensive state in terms of cost-of-living after Hawaii. However, the state's median income, which was the second highest in 2011, helped to offset some of this cost. Prices are slightly lower in Anchorage, the largest metro area in the state. In Anchorage, gas prices average $3.95 a gallon.
1. Hawaii
> Average gas price: $4.34
> 1-yr. price increase: 14 cents (7th smallest)
> Taxes per gallon: 69.0 cents (2nd highest)
Hawaii is by far the most expensive state in which to buy gas. The average gas price of $4.34 per gallon exceeds the record gas prices reached in states like New York and Illinois, both of which are no strangers to high gas prices. Shipping costs drive up the price of gas because all oil refined and consumed as gasoline in the state must be transported across the ocean. Hawaii also has one of the highest excise taxes on gasoline in the nation at 69 cents a gallon.
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