August 16, 2005

Gas Prices

Greeting me over the free hotel breakfast this morning was yet another story about high gas prices plastered on the front page of USA Today (also free):

A handful of service stations in California, Illinois, Nevada, Washington state and Hawaii have begun selling self-serve unleaded regular gasoline for � gulp � $3 or more a gallon. Truckers are enduring three-buck diesel fuel in some places.
The drift toward the dreaded $3 mark would make gasoline the most expensive it has ever been even on an inflation-adjusted basis, not just a nominal one. Gas hit a record $1.417 in March 1981, the Energy Department says. Adjusted for inflation, that's $3.04 today.

Gas prices have a long way to go before $3 becomes the norm rather than the exception. The government said Monday that gas averaged a nominal record $2.550 a gallon, up 18.2 cents over the past week. Motorist club AAA said its average Monday was $2.48, up 7.1 cents overnight. Among states, California was the most expensive at $2.758; South Carolina the cheapest at $2.337.

We just drove 2000 miles. The AAA numbers closely match what we experienced. Highest prices in Washington State; 2.39-2.59 in Iowa, South Dakota, Wyoming and Montana.

Who knows why the difference?

: Zombyboy suggests in comments that sales taxes might be to story. Do they account for the difference? Some, but not enough. Federal taxes are the same everywhere so no impact (except your pocket book). California, where we hear about some of the highest prices has a state sales tax of $.18/gal. This is kind of mid range: Alaska is $.08 and Wisconsin $.32/gal.

I see the impact of zone pricing in my local community. Perhaps it also plays on the state and regional level.

Posted by Steve on August 16, 2005

I think most of the difference comes down to regional taxation--but that might be overly simplistic.

The last time I took time to notice, Colorado taxes added something like fifteen cents per gallon (I haven't paid attention in a while--I wouldn't be surprised if the number were actually higher).

Posted by zombyboy at August 16, 2005 11:48 AM

Florida charges an 8¢ fuel tax and 6% sales tax on a gallon, but there are transportation zones based on the location of refineries. The further East you go in Florida the more expensive the fuel because it's further from the refinery.

Posted by Bryan at August 16, 2005 9:31 PM
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