The national average price of a gallon of regular gas has crept back up after falling from last year’s high of $5.02, recorded in June. As of October 12, 2023, a gallon of regular gasoline costs on average $3.65, according to the American Automobile Association (AAA), which tracks fuel prices.

The decline since last year has been a relief for Americans who’ve been reeling under inflation, which hit a 40-year high in the United States last June. But the relief may be short-lived.

At the start of the year, the U.S. Energy Information Administration (EIA) projected gas prices to fall into the end of 2024, with the average price of regular gas dropping to below $3 a gallon. However, the OPEC+ cartel has cut production several times since April, sending crude oil prices higher. Goldman Sachs forecasts Brent oil will rise to around $100 a barrell by spring 2024. Brent is currently trading at around $85 a barrel.

The EIA now forecasts gas prices to average $3.69 in 2024.

Given the huge variation in gasoline prices across the United States, the pain will be unequally distributed. And the effects on both the cost of living and transport choices for lower and middle-income Americans are significant.

A heat map indicating where gas is most expensive in the U.S. based on data from the AAA.

Why Is California Gas So Expensive?

California has the most expensive gas in the U.S. Today, a gallon of regular gasoline averages $5.70 in California — down from $6 just weeks ago.

High gas prices are one reason why you’ll see a lot of Teslas on the road in California. And that’s by design. Taxes are a major reason why gas prices are so high in California. In California, gas taxes are about fifty percent higher than the national average, according to the American Petroleum Institute.

Federal and state taxes, on average, make up around 17 percent of the cost of a gallon of regular gas at the pump, according to the U.S. Energy Information Agency.

California is a leader in environmental regulations. By making gas less affordable, the state aims to incentivize a transition toward hybrid and all-electric vehicles. But gas taxes are regressive. The driver of a used Corolla pays the same amount as the driver of a luxury vehicle (though the latter probably would need premium fuel). While public transportation is a great equalizing force, its availability is uneven across the state.

And so it’s no surprise that California has seen a population exodus due to the rising cost of living and states like Texas, where gas and the overall cost of living are comparatively cheaper, are experiencing a population boom.

Washington, Nevada, and Hawai Gas Prices Among the Most Expensive in the U.S.

Earlier this year, the state of Washington had the most expensive gas in the United States. Today, a regular gallon of gasoline costs $4.96 a gallon on average in Washington and has remained at around $5 per gallon after surging by 40 cents over the summer.

The Olympic Pipeline, which serves Washington and Oregon, was under maintenance earlier this year amid rising summer demand. That has sent gas prices higher in both Pacific Northwest states.

But the high gas prices have stuck. And that’s due to the state’s new gas tax stemming from the Washington Climate Commitment Act. Washington now has the third-highest gasoline taxes in the country at $0.49 a gallon.

Hawaiians and Nevadans are also paying close to $5/gallon for regular gas. The price of a gallon of regular gas in Hawaii is the third-highest in the country, averaging $4.84 today. David Hackett, an energy industry consultant, says gas prices in Hawaii tend to be “very sticky on the downside.” It’s no surprise that Hawaii has the highest cost of living among U.S. states, according to the Council for Community & Economic Research survey.

Cheapest Gas in the U.S. Is in Georgia

The lowest average gas price in the U.S. is in Georgia, averaging at $3.10/gallon — $2.60 cheaper than California. Gas is cheapest in Georgia due to Governor Brian Kemp’s suspension of the gas tax, which saves drivers roughly 40 cents a gallon.

Gas prices in Texas had fallen below $3/gallon earlier this year, but have since trickled back up to $3.14.

The cheapest gas in America tends to be in the Gulf Coast states, where gas taxes are low and the greatest concentration of U.S. refining capacity is located.

As the map above shows, gas prices tend to fall into regional clusters. Gas is cheapest in the south and most expensive on the west coast.

States With the Most Expensive Gas in the U.S.

These are the states and territories with the most expensive gas in the United States. The prices listed are for the state-wide (or territory-wide) average of a gallon of regular gasoline on October 12, 2023, according to the AAA.

  1. California — $5.70/gallon
  2. Washington — $4.96/gallon
  3. Nevada — $4.84/gallon
  4. Hawaii — $4.82/gallon
  5. Oregon — $4.60/gallon
  6. Alaska — $4.59/gallon
  7. Arizona — $4.41/gallon
  8. Idaho — $4.02/gallon
  9. Utah — $3.99/gallon
  10. Montana — $3.98/gallon

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