The price of gasoline has gone up around 50 percent in the United States since the war in Iran began, but that average can mask big differences across the country.
A gallon of regular fuel cost $4.54 on Wednesday, according to the AAA motor club. But in California, gas averaged $6.16, while it was just $3.96 in Oklahoma. Within those states, prices at the pump differed greatly from county to county and city to city.
More than half of the price of gasoline is tied directly to the price of oil, according to the Energy Information Administration, a federal research agency. Since the United States and Israel began attacking Iran on Feb. 28, a barrel of Brent crude, the international benchmark, has risen more than 50 percent.
Much of the state-to-state and city-to-city variance in the price of gas has to do with the location of oil refineries, the logistics of getting fuel to the pump, state taxes and regulations, and competition among gas stations.
It costs a lot to transport gas.
A significant share of U.S. gasoline is produced at refineries in just two states — Louisiana and Texas. And getting that gas to states far from the Gulf Coast can be expensive. The fuel is typically pumped by pipeline to depots and then moved by truck to gas stations.
“Proximity to pipelines, the ability of pipelines to transcend things like mountain ranges, the access to ports for imports — those are all just basic geographical reasons” for higher costs, said Kate Gordon, the chief executive of California Forward, a nonprofit business group.
“It’s kind of a low-tech answer,” added Ms. Gordon, who worked on energy policy in the Biden administration, “but this is actually kind of a low-tech trading system.”
Other states, including California, Illinois, Pennsylvania and Washington, have oil refineries, too, but they usually cannot meet all of the needs of their states or regions. Each refinery is also configured to process certain blends of crude oil for historical, geographic and technical reasons.
One of the main reasons that transporting fuel around the country can be expensive is the maritime law known as the Jones Act. That law mandates that cargo shipped within the United States be transported on ships that are built in the country and are owned and crewed by Americans.
Because many foreign ships can typically move fuels and other goods at much lower costs, it often makes sense for fuel distributors in, say, New Jersey or California to buy fuel from refineries in Africa or Asia, rather than from Texas. President Trump temporarily waived the Jones Act in March.
Taxes can add up.
Taxes on gasoline, which are generally funneled into construction and road maintenance projects, vary widely from state to state. In Alaska, the average state tax this year on gasoline was just 9 cents a gallon, according to the E.I.A. California, by contrast, levies taxes of almost 71 cents, the highest in the nation.
The average state tax on a gallon of regular this year was just over 33 cents. Nineteen states raised their rates in 2025, including Washington, which bumped up the tax by more than 6 cents. There is also a federal tax of 18.4 cents a gallon.
How much a state government takes “depends on the prioritization of how much they need, and also the cost for doing construction projects,” said Rob Smith, the director of global fuel retail for S&P Energy. “Also, how much fuel is being sold.”
If a state uses a lot of fuel, it may not need a very high per-gallon tax.
“It just depends on how much the state in question wants to make road construction funding exclusively paid for by the fuel tax,” Mr. Smith said, “or how much they want to distribute the cost of funding it through other tax sources.”
California and other Democratic-led states like Oregon and Washington also impose stricter environmental regulations and have various programs to advance less polluting fuels and electric cars. Those policies drive up the cost of fuel.
But that doesn’t mean high fuel prices are an issue only in states with progressive governors and lawmakers. Alaska, a major producer of oil, has low fuel taxes and less stringent environmental regulations than many other states, but gas there cost $5.19 a gallon on Wednesday, or about 64 cents more than in liberal New York. Gas prices in Alaska are high because it’s a large, sparsely populated state far from the rest of the country.
Florida, another conservative state, also tends to have higher prices — gas cost $4.46 a gallon there on Wednesday, about 42 cents more than in Texas. The third-largest state by population, Florida hasn’t had a working oil refinery since the late 1980s.
Local competition can have an effect.
Densely populated areas with several gas stations tend to have lower prices because retailers have to compete with one another for customers. In more remote and less populated areas, station owners may feel less pressure to reduce prices and may need higher prices to pay for the fixed costs of running a business because they sell less fuel.
Wherever they are, station owners base retail prices on what they have to pay for their next delivery of fuel. As the price of oil rises, owners have to shell out more for upcoming shipments.
California is an outlier.
A number of factors lead to the state’s starkly higher fuel prices. Refineries have closed there, reducing local supply and forcing distributors to seek fuel from other countries. The state has also long used a blend of gasoline that is different from almost anywhere else in the country in response to the air pollution that used to choke its residents in decades past. The state’s fuel blend releases less pollution when burned.
“We have a geography that means that smog gets trapped in our populated areas like Los Angeles, and so we burn cleaner fuel, partly to deal with that problem,” Ms. Gordon said.
She added: “We also put an additional cost on each gallon to transition away from the global oil market because we recognize our vulnerability.”
Source:
www.nytimes.com
