And so today in arbitrary gas wackiness; a few hours ago, in fact, the Lundberg survey came out with its assessment that gas prices have fallen to the discount rate of under $4 per gallon and, on a feverish note, quickly sent it out on the press swill. The highest prices are in Alaska, which one can easily understand given the transportation costs to lug the stuff up there, no surprise there but get this: the lowest national price is in Wichita, Kansas. Wichita. While I’m happy for the good folks there who can expect to fill up for a tick over $3.64, I am, like many others, forced to question why Wichita? Why not King of Prussia Pennsylvania or Hell, Michigan (they both exist) or the Speedway down the street from me with the mustache lady and 98 cent gallon-sized cups for fountain drinks?
In cases such as Hawaii and Alaska, for example, gas prices are high for quite obvious reasons. It costs quite a bit to transport the gasoline and the base price is far higher than anywhere in the country. In states with crazy prices such as California, for instance, it is worth keeping in mind the fact that the taxes on gasoline vary from state to state. Oftentimes, the states that already might be facing higher fuel costs because of (and who knows how valid this really is, as often as we hear it) transportation costs also have exorbitant taxes on top. States with notoriously high gas prices like California and Michigan also have upwards of 7% in taxes to pay whereas there are plenty of states, such trusty old North Dakota, for instance, that have spared their citizens that cost.
If you have ever been curious about how much you’re really spending on tax versus the gasoline itself, I recommend this chart that offers a state-by-state breakdown of gas taxes with revealing comments about the nature, function and amount of the tax. It uncovers a rather enlightening bit of information, all neatly organized into pretty graphs, which is always a bonus for me whenever numbers are involved. Chances are, the first thing you’ll notice is that wild variation between taxation across state lines that might help to explain the current situation that presented us today with record nationwide lows in Wichita. While some states have no tax and relatively low prices that are commensurate with rest of the country, Kansas is only slightly above average in terms of pre-tax gasoline per gallon and only has a 1 cent per gallon “environmental” tax (which sounds a lot better than other taxes such as the ubiquitous “Petroleum Products Gross Receipts Tax” in Jersey or the equally nefarious-sounding “company franchise tax”—both of which sound like they line the pockets of oil companies themselves).
Before I hit the sack I’ll leave you with some good news and some bad news. According to the same report from Lundberg making the web circuit at this very moment, gas prices, “barring any dramatic change in the global oil market…may soon pull back another 10 cents per gallon” which is sweet. And a nice gesture. But the bad news is, none of it makes sense, all of it is illogical and the only way to interpret it is to pick between 10-20 reliable news sources, mine for quotes from oil industry experts and then cry. Taxes do account for some of the price variances across states as do transport and related costs, but in general, don’t feel silly for ever saying that it is still kind of arbitrary.