Q:

How do state taxes affect gasoline prices?

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Quick Answer

State gasoline taxes increase the price paid per gallon in each state by 30.48 cents on average as of July 2015, according to the American Petroleum Institute. Federal gasoline taxes total 18.4 cents per gallon in every U.S. state, says the Federal Highway Administration.

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How do state taxes affect gasoline prices?
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Full Answer

In 12 states, state gasoline taxes total fewer than 40 cents per gallon, while these taxes are levied at a rate in excess of 49.5 cents per gallon in 19 states, according to the American Petroleum Institute. Gasoline taxes are 40 and 49.5 cents per gallon in the remaining 19 states of the United States, according to the American Petroleum Institute. Pennsylvania's gasoline tax is the nation's highest at 51.6 cents per gallon while Alaska's is the lowest at 12.25 cents per gallon. Alabama also charges state gasoline taxes below the national average.

Gasoline prices vary significantly by state, from $1.934 per gallon in Alabama to $3.087 per gallon in Alaska for regular unleaded fuel on Sept. 24, 2015, according to the AAA Daily Fuel Gauge Report. The nationwide average fuel price stands at $2.289, with prices in most states ranging between two and three dollars per gallon. Pennsylvania's gas price of $2.37 is 22nd highest in the nation and near average.

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