In his post Why do gasoline prices differ across U.S. states?, James Hamilton at Econbrowser does a great job of explaining what drives regional variations in gasoline prices. Along the way, he provides some insights and a good explanation for California’s habitually high gasoline prices.
- “California motorists pay 86 cents/gallon more than the folks in Wyoming”
- “The tax on a gallon of gasoline in California is 35 cents higher than in Wyoming”
- “Motorists in California… are required to use a higher-quality fuel in order to help limit air pollution.”
- Another important “factor is differences in the cost of crude oil available to refineries in different parts of the country.”
The post includes some great graphics like the one above and links to valuable information and analyses.