Gas Prices by State – A Complete Overview

31.12.2021
Milena

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 August 2021 was $3.17 per gallon. That amount includes taxes (16%), distribution and marketing (13%), refining (16%), and crude oil (55%).

For diesel, the gas prices nationwide averaged $3.36 per gallon in August 2021. Here, the contribution of the different factors is as follows: taxes (17%), distribution and marketing (19%), refining (13%), and crude oil (51%).

How Is Gas Price Calculated

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 $1.605. These states had the lowest and the highest average gas price by state respectively in August 2021.

Large fuel tanks have a capacity of about 17 gallons, meaning one topping up can cost Californians about $27 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 $1,400 more on gasoline because California has the highest gas prices in the nation. Mississippi residents, in contrast, annually can save $1,400 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 August 2021. 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.

Gas Price per Gallon by State

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, Louisiana, and Alabama pay the least per gallon of gas. Their respective average gas prices in August 2021 were $2.795, $1.838, and $2.847.

The gas prices in California are the highest for regular gasoline. Californians pay $4.400 per gallon. 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 Nevada also have high gas prices by state, with their residents paying $4.090 and $4.054 per gallon, respectively.

Regular Gas Price per Gallon by State

Price of Mid-Grade Gasoline by State

Mid-grade gas costs more than regular gasoline. The lowest price you can get it for is $3.094, and it’s again available in Mississippi. Missouri and Oklahoma are the other states with the lowest gas prices in the USA for mid-grade fuel. The California, Nevada and Hawaii gas prices meanwhile are the highest if you want to buy mid-grade gasoline. California is again the most expensive state In this category, with residents paying $4.588/gallon, followed by Hawaii and Nevada with $4.309 and $4.279, 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 $3.376 per gallon, which is less than the $3.394 and $3.415 paid by Missourians and Mississippians. The most expensive premium gas prices are found in California, Hawaii, and Nevada. Premium fuel in these states costs $4.709, $4.569, and $4.460, 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, Mississippi offers the cheapest average gas price by state of $2.937 per gallon. Americans living in Texas and Louisiana pay the 2nd and 3rd lowest diesel fuel prices by state of $2.948 and $2.471. The average price of gas in Hawaii is the second-highest for diesel, at $4.569 per gallon. The California gas prices are the most expensive at $4.709. Nevada rounds up the list of the three worst states for diesel prices, with local residents paying $3.953 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 2021.

Gas Tax per Gallon in Cents by State

Alaska, Missouri, and Mississippi have the lowest gas tax by state. While Missouri and Mississippi have low gasoline prices, Alaska has the 8th 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 14.98 cents in taxes per gallon, while Californians need to cough up 66.98 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, 2020, and 2021.

Average Gas Prices by Year

If you compare the gas prices by state by year, all states registered noticeable jumps between 2020 and 2021 amid the Covid-19 pandemic. Ohio gas prices, for example, which had previously been fairly steady, registered a near-dollar jump. Delaware gas prices meanwhile saw a smaller, albeit still noticeable change. Still, the state’s gas prices today are higher than what residents used to pay for gasoline in 2020.

Summary

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 $1.605 per gallon. This seemingly insignificant amount results in extra costs of about $1,400 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.

References: AAA, EIA, NCSL, AAA, API

Leave a Reply

Your email address will not be published. Required fields are marked *