Growing up, there was always one gas station in town my family avoided at all costs. That station had the highest prices, of course, and was only for the foolish or desperate. It made more sense — and saved more cents — to travel an extra mile or so to the cheaper station. But some Americans are simply out of luck when it comes to tracking down cheap gas. Today we’ll take a look at the states where it costs the most to fill up, and why relief may be nowhere in sight.
Pain at the pump
These days, if you are fortunate enough to live in a tropical paradise, you are also unfortunate enough to pay the highest average price for gasoline in the country. Hawaii is first on the list of the five states with the most expensive gas:
| Rank | State | Regular Gasoline |
|---|---|---|
| 1 | Hawaii | $4.39 |
| 2 | California | $4.02 |
| 3 | Alaska | $4.01 |
| 4 | District of Columbia | $3.90 |
| 5 | New York | $3.85 |
Source: AAA
Hawaii only has two operating oil refineries. Tesoro Corporation (NYSE:TSO) plans to close the one it owns, Chevron Corporation (NYSE:CVX) owns the other, and the cost of shipping crude oil out there is the main reason that gas is so expensive. California is ranked second largely because it has the highest taxes on gas in the country. The combined local, state, and federal taxes tack on just shy of $0.69 per gallon, according to the American Petroleum Institute.
What’s in a gas price?
Historically, there has always been more to gas prices than the price of oil. Federal, state, and local taxes, as well as the fees slapped on as gasoline changes hands before it hits your tank, all contribute to the price of gasoline.
The first gasoline tax began in 1919, and 10 years later every state in the union had imposed its own fee on gasoline sales. The revenue collected was used to build out roads and highway infrastructure. In 1929, the taxes brought in $431.4 million, allowing close to half of all states to eliminate property taxes as a source of highway funding.
Flash forward to today
Relying on gas tax revenue to maintain our transportation infrastructure is a tricky business. Today, American roads are in desperate need of repair, but because gas is expensive many of us are driving less. Those that still head out on the highway are increasingly using less gasoline because they are driving more fuel-efficient vehicles.
As a result, many states are making plans to increase taxes on gasoline. Last week, The Wall Street Journal reported that 17 states are considering or have already enacted tax hikes to give their transportation budgets a boost. As further evidence that these are desperate times for infrastructure budgets, 18 states haven’t enacted a gas tax increase in 20 years or more.
It may well be that high gas prices are here to stay.
The article Does Your State Have the Most Expensive Gasoline in America? originally appeared on Fool.com and is written by Aimee Duffy.
Fool contributor Aimee Duffy has no position in any stocks mentioned. Click here to see her holdings and a short bio. If you have the energy, follow her on Twitter, where she goes by @TMFDuffy. The Motley Fool recommends Chevron.
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