5 states with the lowest gas prices

By RPrichard Dec 11, 2012 12:54PM

Concerns about global economic weakness have pushed crude oil prices down in recent weeks. The decline was seen in gas prices, too. As of Dec. 6, national prices averaged $3.38 per gallon, down from $3.46 per gallon a month before. Some states have kept their prices significantly below the average nationwide price. Based on data from The American Automobile Association, 24/7 Wall St. reviewed the 10 states with the lowest gas prices.

States impose gasoline taxes and fees, in addition to federal gasoline taxes. These taxes can vary significantly from state to state, affecting regional prices. It's not surprising, then, to find that the 10 states with the lowest gas prices tend to have among the lowest fuel taxes. The states on this list are below the median in terms of taxes and fees, with four of the states on this list among the 10 states with the lowest taxes and fees per gallon.

States with refineries also tend to have lower prices because oil can be moved to local stations at much cheaper prices, which results in lower prices at the pump. Most of the states on this list have refineries located within its borders. Texas, which has among the cheapest gas in the country, has 26 refineries, more than any other state in the country. Louisiana has 18 refineries, the second most of any state.

Overall cost of living is generally low in the states with the lowest gas prices. Tennessee, which has the fourth-cheapest gas prices, has the lowest cost of living in the country. Oklahoma, which has the fifth-cheapest gas, has the second-lowest cost of living. Overall, all the states on this list are in the lower half in terms of cost of living. And five of the 10 states on the list have among the 10-lowest cost of living.

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But while cost of living is low, so is the amount of money state residents bring in. All of the states on the list had median household income in 2011 below the national median income of $50,502. Seven of the 10 states had among the 10 lowest median incomes in the country.

Based on AAA’s Daily Fuel Gauge Report, 24/7 Wall St. reviewed the 10 states with the lowest gas prices as of Dec. 6. We also looked at gas prices from the same time one week, one month and one year before, as well as peak prices this year, to monitor the recent activity of gas prices in different parts of the country. We also considered taxes and fees per gallon by state from the American Petroleum Institute, refineries and refining capacity by state from the U.S. Energy Information Administration, cost of living by state from the Council for Community and Economic Research and 2011 median household income from the U.S. Census Bureau.

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These are the states with the lowest gas prices.

1. Missouri

  • Regular gas price per gallon: $3.11
  • Tax per gallon: 17.3 cents (6th lowest)
  • Number of operating refineries: 0

Missouri currently has the lowest gas prices in the country, at just $3.11 per gallon, the same as a month ago. However, the current price is up 9 cents a gallon from a year ago, when Missouri was also the cheapest place to fill up at the pump. Prices peaked at about $3.65 per gallon in early April, well below the roughly $3.90 per gallon across the country. In the state’s two largest metropolitan areas, St. Louis and Kansas City, gas prices are even lower, at just $3.09 a gallon.

2. Texas

  • Regular gas price per gallon: $3.14
  • Tax per gallon: 20.0 cents (tied-11th lowest)
  • Number of operating refineries: 26

Gas prices in Texas have fallen significantly in recent weeks -- a gallon of gas cost $3.25 a month ago, with five states having lower gas prices at the time. Now, only gas in Missouri is cheaper. Gas prices in the state have only risen 4 cents a gallon in the past year, compared to the 10 cents a gallon increase across the U.S. Texas has 26 operating refineries, more than any other state in the country. Texas also levies a low 20 cents a gallon in taxes and fees, among the bottom-third of all states.

3. South Carolina

  • Regular gas price per gallon: $3.15
  • Tax per gallon: 16.8 cents (4th lowest)
  • Number of operating refineries: 0

South Carolina residents benefit from some of the nation’s lowest state taxes on gas; residents pay just 16.8 cents per gallon. Gas prices in the state have diverged from the rest of the nation over the last month. While the current average price nationwide declined by 8 cents a gallon over the past month, South Carolina’s increased by 1 cent a gallon during that time. In the Charleston-North Charleston metro area, however, prices are down 11 cents from the month before.

4. Tennessee

  • Regular gas price per gallon: $3.16
  • Tax per gallon: 21.4 cents (15th lowest)
  • Number of operating refineries:1

Gas prices in Tennessee have only risen 6 cents a gallon from December 2011, boosting the state’s ranking from sixth-lowest to fourth-lowest. In the state’s two largest metropolitan areas, Memphis and Nashville, prices are even cheaper, at $3.10 and $3.15, respectively. Tennessee has the lowest cost of living among all states in the U.S. Included in that figure is the cost of transportation, where Tennessee also has the overall lowest cost.

5. Oklahoma

  • Regular gas price per gallon: $3.16
  • Tax per gallon: 17.0 cents (5th lowest)
  • Number of operating refineries: 5

Oklahoma’s gas prices are the fifth-cheapest in the country, up from being fourth-cheapest in December 2011, as gas prices have risen 7 cents a gallon since then. In the past year, prices peaked at just over $3.70 a gallon in September, although that was still lower than the $3.90 per gallon peak price across the U.S. Gas isn’t the only thing that is inexpensive in Oklahoma -- the state had the second lowest cost of living in the U.S.

For the next five cheapest states, click here to read 24/7 Wall St.'s "States with the cheapest gas."