America’s motorists are enjoying gasoline prices about 20 cents per gallon cheaper than this time last year, thanks to falling oil prices. Since July, prices are down about 15% nationwide – or nearly 50 cents – to an average $3.14 a gallon, according to data from Gasbuddy.com.
This has a stimulus effect on the U.S. economy, saving us about $100 billion in annualized fuel costs, according to economist Ed Yardeni. That works out to about $300 in annual fuel savings for every American. Just in time for the holiday season.
The price of gas has fallen fastest in Missouri, down 18% to $2.77 a gallon – which is also the cheapest gas in the nation.
♦ Missouri motorists benefit from being located at the geographic center of the Lower 48, which makes it a transportation hub and rife for competition among the petroleum products pipelines that cross the state, as well as the barges full of fuel that ply the Mississippi and Missouri rivers.
♦ Missouri also has one of the lowest state gasoline taxes, at 17.3 cents per gallon. Add that to the 18.4 cent federal tax, and taxes make up an overall 35.7 cents per gallon.
On the flipside is Hawaii, which suffers the most expensive gasoline at $4.07 a gallon, and has also seen the smallest decrease in price during that time, just 6%.
♦ Hawaii has expensive gasoline because the nearest oil fields are half an ocean away and it has just two little refineries. Hawaii’s gas price has those higher transport costs built in — costs that don’t change as quickly as oil prices do.
♦ Hawaii has one of the highest gas taxes, for a total of 66.29 cents per gallon.
The other states with the least price reductions are almost as remote: Alaska, Montana (both down 9%) and Wyoming (less than 8%).
Being inundated with petroleum supplies from nearby refineries helped speed price cuts in Texas (down 15%) and New Mexico (16%) as well.
New Jersey has lots of refineries and petrochemical plants, so there’s plenty of supply into that market. And New Jersey also enjoys the second-lowest combined gasoline tax (after Alaska) at 32.9 cents per gallon.
Compare that with New York, which has the biggest tax burden at 68.5 cents per gallon. As a result, New Jersey gas prices are down 16.5%, while New York is only off 11%.
Tom Kloza of Gasbuddy.com foresees America’s average gasoline price dropping below $3 a gallon within a week. If prices fall much more, we could see yet another stall out in the electric car revolution. Not that they buy many of those in Missouri anyway.
Read the Entire Story and view the Map in Forbes.com.
