Why Gas Prices Vary by Region

01 Regional Price Differences

Gas prices differ by about $1.30 per gallon between the West Coast (highest) and Gulf Coast (lowest) regions, driven mainly by crude oil costs, refining capacity, state taxes, distribution logistics, and local fuel regulations. The EIA tracks gasoline prices across five Petroleum Administration for Defense Districts (PADDs) and reports these same persistent price differences between regions. The West Coast (PADD 5) consistently has the highest prices in the nation, while the Gulf Coast (PADD 3) consistently has the lowest.

The $1.30 spread between the Gulf Coast and West Coast averages represents one of the most consistent regional price gaps in U.S. energy markets. This gap has persisted for decades, driven primarily by California's stricter fuel-blend requirements and more limited West Coast refining and pipeline connectivity.

That $3.30 U.S. average reflects one point in a much longer story—see how the national average has moved year by year since 1950.

02 State Tax Variation

State gasoline taxes are the most visible factor driving regional price differences. Per FHWA data, state excise taxes on gasoline range from $0.08 per gallon in Alaska to $0.596 per gallon in California—the highest state gas tax in the country, narrowly ahead of Pennsylvania. When combined with the federal excise tax of $0.184 per gallon, total fuel tax varies by nearly $0.52 per gallon between states.

For a driver using 500 gallons per year, the difference between California's total tax burden ($0.780/gallon) and Alaska's ($0.264/gallon) translates to $258 per year in taxes alone. Several states also apply sales taxes on top of excise taxes, further widening the gap.

03 Refining and Supply

Regional gas prices have persistently sat on opposite sides of the national average for decades. Using the EIA's weekly PADD-level price series going back to the early 1990s, the Gulf Coast (Texas, Louisiana refining region) has averaged roughly $0.17 per gallon below the national average, while the West Coast has averaged roughly $0.36 per gallon above it—a persistent spread of about $0.54/gallon between the two regions. As of February 2026, the gap was far wider: Gulf Coast regular averaged $2.53/gallon versus $4.11/gallon on the West Coast, a $1.58 difference.

The West Coast's persistently higher prices reflect its more isolated supply chain: California's refineries produce a specialized fuel blend (California Reformulated Gasoline) that cannot easily be supplemented by imports from other U.S. regions, and the region has less surplus refining capacity than the Gulf Coast. The Gulf Coast, by contrast, sits at the center of the country's refining industry and typically has gasoline priced below the national average.

04 Environmental Regulations

Some states require specialized fuel blends that cost more to produce. California’s reformulated gasoline (CaRFG) standards are the most stringent in the nation, adding an estimated $0.10–$0.20 per gallon in refining costs compared to conventional gasoline. California also operates a cap-and-trade carbon market that adds approximately $0.15–$0.25 per gallon to fuel costs through carbon allowance prices.

Beyond California, several other states and metropolitan areas require summer-blend reformulated gasoline under federal Clean Air Act provisions. The EIA identifies at least 15 distinct gasoline blends required across different parts of the country during summer months, which fragments the supply chain and can contribute to regional price spikes.

05 Distribution and Geography

The physical distance from refineries to retail stations affects prices. The Gulf Coast’s extensive pipeline network can move gasoline cheaply to the East Coast and Midwest via major trunk lines. The Rocky Mountain region, however, is served by fewer pipelines and must rely more heavily on truck transport, which costs $0.05–$0.15 per gallon more than pipeline delivery.

Hawaii, as an island state entirely dependent on imported petroleum, consistently has among the highest gasoline prices in the nation. Alaska faces similar logistical challenges despite being a major oil producer, because it lacks sufficient local refining capacity and must import refined gasoline products.

Seasonal factors also interact with geography. The Midwest experiences more pronounced seasonal price swings than other regions because its refineries switch between winter and summer fuel blends on a tight schedule. If spring maintenance runs long or unexpected demand spikes occur, Midwest prices can temporarily exceed even West Coast levels.

06 Data Sources

1. EIA: Weekly Retail Gasoline and Diesel Prices, by PADD region. eia.gov
2. EIA: "Factors Affecting Gasoline Prices." eia.gov
3. FHWA: State Motor-Fuel Tax Rates, Table MF-121T, 2021 reporting period. fhwa.dot.gov