Why do different regions, states have such varied gas prices?

You may have seen stories about how high gas prices are climbing in some parts of the country, but why — when we’re all paying for the same fuel — does it cost more in California than it does in Minnesota?

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According to AAA, the average cost for fuel for Tuesday was $3.39 a gallon. You can track the nationwide, and your state average here.

The average went up about 6 cents over a week, and every day for the past 20 days, AAA reported.

According to the U.S. Energy Information Administration, there are a variety of factors affecting regional gas prices, including:

  • Distance from the supply.
  • Supply disruptions.
  • Retail competition.
  • Operating costs.
  • State and local taxes.

Some of the biggest differences in cost are seen in California where the price at some pumps has inched closer to $8 a gallon.

AAA though said that the state’s average is $4.55 a gallon as of Tuesday.

According to the EIA, California’s prices can be higher than other areas because California has a “unique blend of gasoline” and that the state has “more stringent” rules than the federal government when it comes to reformulated gasoline. Calfornia also has a higher fuel tax when compared to other states, the EIA said.

California can also be affected by supply issues, with refineries in the state needing “to run at near full capacity” to meet demand. If one or more refineries have an issue at the same time, then the price for gas will go up.

Along with California, the following areas have the highest average gas price in the country, according to AAA:

  1. California
  2. Hawaii
  3. Nevada
  4. Washington
  5. Oregon
  6. Alaska
  7. Idaho
  8. Utah
  9. Washington, D.C.
  10. Pennsylvania

The lowest price for gas is in Oklahoma, at just about $2.99 a gallon on Wednesday, according to Gas Buddy.

According to AAA, the overall price of gas has been increasing because global production is still at pre-pandemic levels but demand has been rising.