Living in one state or another can come with lots of benefits and drawbacks. How much you pay for gas is one of the things that vary in different jurisdictions. With the gas prices by state drastically differing, filling up your tank in some states can save you lots of money. While the difference between the most and least expensive price per gallon is only $1.379, it quickly adds up. Americans living in Mississippi, for example, have the cheapest gas in the country and save about $1,200 on regular gasoline per year.
How Is Gas Price Calculated and Why Does It Matter?
The US gas prices by state depend on several factors. For regular gasoline, for example, the cost of gas in July 2020 was $2.18 per gallon. That amount includes taxes (22%), distribution and marketing (22%), refining (11%), and crude oil (44%).
For diesel, the gas prices nationwide averaged $2.43 per gallon in July 2020. Here, the contribution of the different factors is as follows: taxes (23%), distribution and marketing (28%), refining (10%), and crude oil (40%).
Note that every jurisdiction has individual gas taxes that affect both the current and historical gas prices by state. Some places though (Alaska being one example) have high gasoline prices despite low gas taxation.
As for the importance of the price of gas, the difference between Mississippi and California is $1.379. These states had the lowest and the highest average gas price by state respectively in September 2020.
Large fuel tanks have a capacity of about 17 gallons, meaning one topping up can cost Californians about $23 more when compared to the gas prices in Mississippi. Americans top up their tanks, on average, once per week, and there are 52 weeks a year. This means that Californians spend over $1,200 more on gasoline because California has the highest gas prices in the nation. Mississippi residents, in contrast, annually can save $1,200 only because they live in the state with the cheapest gas in the USA.
Average Gas Prices by State
Note that the gas prices in the USA frequently change, following some trends. In late summer, for instance, the costs grow as that’s the period when Americans drive the most. During winter months, by contrast, the gasoline prices per gallon drop alongside the demand.
In the table below, you can find the national gas prices by state recorded in September 2020. Meaning, these averages are likely to change going forward. One thing to keep in mind, however, is that these generally low prices were heavily affected by the COVID-19 crisis. So, the average gas prices throughout the country are expected to grow once life and the economy get back to normal.
Regular Gas Price per Gallon by State
Gasoline costs vary depending not only on where you buy it but also on the type you use. Meaning, gas prices by state for diesel fuel are different from the state prices of regular gas. First, we’ll go over the best and worst jurisdictions for regular gasoline prices.
Residents of Mississippi, Texas, and Arkansas pay the least per gallon of gas. Their respective average gas prices in September 2020 were $1.857, $1.873, and $1.893.
The gas prices in California are the highest for regular gasoline. Californians pay $3.236 per gallon or $1.379 more than Mississippians. Residents in California additionally deal with a high tax burden by state. California is also among the worst places for cigarette prices by state. So, this isn’t the best destination for those who hope to pay low taxes and save money on various products. Hawaii and Washington also have high gas prices by state, with their residents paying $3.226 and $2.827 per gallon, respectively.
Price of Mid-Grade Gasoline by State
Mid-grade gas costs more than regular gasoline. The lowest price you can get it for is $2.154, and it’s available in Missouri. Mississippi and Oklahoma are the other states with the lowest gas prices in the USA for mid-grade fuel. The California, Washington, and Hawaii gas prices meanwhile are the highest if you want to buy mid-grade gasoline. In this category, however, Hawaii has the highest national fuel average of $3.446. Californians and Washington residents pay $3.413 and $3.028 per gallon, respectively.
US States With Best and Worst Premium Gas Prices
Oklahoma has the lowest current gas prices by state in the category of premium gasoline. Its residents pay $2.368 per gallon, which is less than the $2.417 and $2.483 paid by Missourians and Mississippians. The most expensive premium gas prices are found in Hawaii, California, and Washington. Premium fuel in these states costs $3.649, $3.535, and $3.190, respectively.
Diesel Average Gas Price by State
Diesel fuel costs more than regular gas, but it’s less expensive than mid-grade and premium gasoline. In this category, Missouri offers the cheapest average gas price by state of $2.008 per gallon. Americans living in Oklahoma and Texas pay the 2nd and 3rd lowest diesel fuel prices by state of $2.02 and $2.053. The average price of gas in Hawaii is the highest for diesel, at $4.027 per gallon. The California gas prices are the 2nd most expensive at $3.362. New York rounds up the list of the three worst states for diesel prices, with New Yorkers paying $3.362 for this type of gas.
Gas Tax by State
State gas tax affects all the current gas prices in the table above. Some states have high taxation on gas, and that’s why gasoline costs more there. In some states, however, fuel is expensive despite the low taxes. Meaning, while taxes indeed affect the average gas prices by state, they don’t play the most critical role.
In the table below, you can find out how many cents per gallon the gas tax was in every state in July 2020.
Alaska, Missouri, and Mississippi have the lowest gas tax by state. While Missouri and Mississippi have low gasoline prices, Alaska has the 6th highest gas prices by state. California, in addition to having the highest average gas price in the country, also has the highest gas tax. Alaskans pay only 13.77 cents in taxes per gallon, while Californians need to cough up 62.47 cents per gallon. Pennsylvania and Illinois are the only two states where residents pay taxes of over 50 cents per gallon.
States With Variable Gas Taxes
Not all states have fixed gas taxes, however – 22 states and Washington, D.C., have variable taxes that grow over time. In California, the place with a high historical gas price by state, the tax varies with inflation. In most states, taxes vary either with the USA average gas prices or inflation. Other states with variable gas tax include Florida, Hawaii, Georgia, New York, and New Jersey.
Average Gas Prices by Year
Gas prices frequently change on both national and state levels. The United States average gas prices used to be higher a few years ago. In the table below, you can see how the average gas prices by year moved in 2017, 2019, and 2020.
If you compare the gas prices by state by year, Ohio stands out as the jurisdiction whose gasoline costs dropped the most. In 2019, one gallon was by $0.612 more expensive than the Ohio gas prices seen in 2019. The least significant one-year decrease of $0.151 was seen in the Delaware gas prices. Still, the state’s gas prices today are still lower than what residents used to pay for gasoline in both 2019 and 2017.
Fuel price varies and depends on various factors. State taxation, distribution costs, and the price of crude oil affect gasoline end-user costs the most. That’s why the gas prices by state drastically vary, too. The price difference between the state with the highest and the one with the lowest fuel price is $1.379 per gallon. This seemingly insignificant amount results in extra costs of about $1,200 a year. So, next time you want to relocate, don’t just focus on the best places to invest in real estate in America, for example. Instead, consider other essential factors, like gas prices, too.