Fuel taxes

Energy Information Administration data shows that the average national price per gallon of gas rose from $3.02 on March 2 to $4.12 on April 27 as the global economy dealt with the limited crude oil supply passing through the Strait of Hormuz. Yet prices vary broadly by state. Why? Several reasons, including a state's proximity to an oil supply, competition among gas stations, and supply disruptions. But other factors are more directly in the hands of regional governments, namely, taxes.

State governments levy excise taxes (excise taxes are typically applied per unit of a good or service, in this case, per gallon). In January, the highest gas excise taxes were in California (61 cents/gallon), Pennsylvania (58), Washington (55), and Michigan (52). Alaska and New York charged 8 cents per gallon, the lowest in the nation. 

 

Several states have additional taxes and fees, including for storage, inspection, or environmental cleanup. Plus, many apply general sales taxes to purchases, including gas. New Jersey added the most (39 cents/gallon), followed by Vermont (19 cents/gallon), Florida, Indiana, and Illinois (all at 18 cents/gallon).   

 

With all these taxes combined, California had the highest state tax (71 cents/gallon), while Alaska had the lowest (9 cents/gallon).