Gas-Saving Moment of the Day: Move to a Different State

It should come as no surprise that a state's geographic location has a lot to do with how much gasoline costs there. As Slate.com points out, right now the cheapest gas in the country can be found in Missouri. While the national average hovers over $4, Missourians are paying a scant $3.82 per gallon (jeez, they're practically giving it away).

There are a number of reasons for this. Missouri doesn't produce any oil itself, but it is close to several oil-producing areas, like Texas, Oklahoma and the Gulf Coast. Several major pipelines run through Missouri, and both the Mississippi and Missouri rivers see frequent traffic of oil barges.

For the same reasons, California normally gets the nation's highest gas prices. Cut off from oil supplies east of the Rockies, California also has tougher emissions standards that require a more expensive method for blending gasoline. Urban areas generally must sell reformulated gas to comply with air pollution regulations.

There's been a lot of talk about the federal gas tax from presidential candidates, but each state also has a gas tax. Missouri's tax is low, but New Jersey has the lowest state tax in the country at a measly 14.5 cents per gallon. This allows it to stay well ahead of its neighbor, New York, where the average cost is roughly $4.24 a gallon — 28 cents higher than Jersey.

Gas sold at big-box retailers or stations attached to convenience stores also tends to cost less because these businesses can afford to sell gas closer to wholesale costs because they have a large source of secondary income. This trend is prevalent in Missouri, as well as Kansas, Pennsylvania, and parts of the upper Great Lakes, which lowers the average price for a state.

Finally, Missouri mandates that all gas have a 10 percent ethanol blend, which seems to save consumers about 10 cents per gallon. However, in light of the food crisis, lawmakers have begun to consider retracting that law, which might ship the title for the nation's cheapest gas elsewhere.

Cheap Gas in Missouri (Slate)

Related:
More Gas-Saving Moments of the Day (KickingTires)

Comments

[LM]

New Jersey - Low Gas Taxes = Pot Holes Galore.

Of course, I'm in Boston and we pay more in gas taxes and still have potholes, but they fix them at least.

[Liger]

I am in South Kansas City, Missouri and I lucked out big time! The station was out of regular gas (at $3.77 a gallon) so I got premium for the price of regular, $3.77 a gallon! (My car needs premium, it knocks on regular, otherwise I wouldn't get premium) But we do have a lot of potholes here in Missouri as well. Although, I have been to New Jersey recently, and you definetly have more potholes than us.

[Colin B.]

The New York Times did an interesting multimedia thing on this. While California's and people from the great state of Chicago ;) bemoan high gas prices

relative to their high incomes, they're actually paying less than what some of these poorer states are paying- as a percentage of their income.

http://www.nytimes.com/interactive/2008/06/09/business/20080609_GAS_GRAPHIC.html

[maxwell]

Most New York counties also tack sales tax onto the gas. That's right, they tax, not only the gas but the state and federal taxes. As the price of gas goes up, and/or the state increases excise tax, the amount you pay in sales tax goes up.

In my case the county sales tax is 4.75%. It brings the total tax hit on a gallon of gas to about 65 cents at today's prices.

[Dave T.]

FYI
I paid $4.79 for premium in Chicago today.

[LM]

The tax you pay on gas SHOULD go up as the price rises. The fact that the gas tax is generally tied to the gallon and not the price is ludicrous, as we rely on the gas tax primarily to pay for transportation infrastructure. Think about it this way - the cost of everything has risen (labor, concrete, steel, asphalt) yet the revenue from the gas tax is just tied to the gallon.

And y'all wonder why cities and states have such terrible infrastructure! People expect to get things for free ("Cut my taxes!" "Fix my pothole!" arguments are incompatible.)

[maxwell]

Colin B.: It's a good idea to take anything you read in the NY Times with a bit of skepticism.

While it may look like people in certain area pay a higher amount of their income for gas, it leaves out the total cost of living for the area. In some cases a far lower cost of living in area trumps the higher incomes in other areas.

The NYT map shows Long Island, NY to have one of the lowest percentage of income paid for gas. It does not show that the AVERAGE tax on a private home is over $7,000 per year. For instance the tax on my modest 1400 sq. ft. split in a mixed blue/white collar area is $8,400. If my taxes were even remotely in the ball park with 99% of the US, I'd have an extra $6,400 (or more) for gas.

Also, certain areas, generally around major cities, have concentrations of a small number extremely high income people. Think of the big Wall St. muckity-mucks in NY or high paid actors in LA. That totally distorts averages. For instance, If you have 99 people who make $20 thousand per year and one person who makes $5 million, the average of those 100 people would be $69,800. That distortion makes certain places look "rich" while the reality is that most people are just scraping by.

[Tommy Banks]

What about removing the millions of speed breakers across the U.S. In my neighborhood, you have to slow down almost to a crawl as they have made the speed breakers so much rougher than they used to be. Then you go only about 150 feet before you have to come to a crawl again for another speed breaker. There is no telling how much gas this country could save without the constant slowing to a crawl, and then accelerating to get the car up to the speed limit again.