Cars are costly … from monthly payments to repairs to auto insurance. And then there’s gas … which is pretty costly in and of itself. But you don't need us to tell you that: you get an unpleasant reminder every time you pull in to the pump. And some of us are feeling the bite a bit more than others.
First, why are prices so high in general? Well, there are a few factors: the cost of crude oil, the cost of refining, the cost of getting the gasoline to the pump itself, overall demand, and taxes. Every state has its own gas tax, for example.
So which states have it the worst...and why? Interestingly, the ones that take it on the chin the hardest are all on our West Coast.
Cost Per Gallon: $4.56
It seems weird that a state known primarily for its oil would have expensive gas prices, but the reason is really pretty simple. Sure, Alaska has a lot of black gold sitting under its crust...but it doesn't have the refinery capacity to meet demand. So to get gas, Alaska has to pump out the crude oil, ship it out to refineries in California or even Texas, and then ship the gasoline back. That costs.
Worse, there's no easy way for distributors to get any sort of product to our northern-most state. Either they can drive it through Canada, which means they'll have to comply with Canadian shipping rules...or they'll have to bring it in by boat. Neither are good for keeping costs low. The only bright spot is that its gasoline taxes are the lowest in the nation, since for obvious reasons they've got enough problems.
And that puts it in the same boat with our other non-contiguous state...
Cost Per Gallon: $4.55
It's a problem the Aloha State knows all too well. Everything, and we mean everything, that is sold in Hawaiian stores has to be shipped over by boat. That's why pork is so popular over there: it's a lot cheaper to run a pig farm in Hawaii than it is to ship over steaks in refrigerated ships. Unfortunately for Hawaiians, there's no local oil to farm, which means they get their gas by boat...and pay for the "privilege."
Cost Per Gallon: $4.21
The Golden State has an entirely different problem. It's got plenty of refinery capacity, but it's not a major oil producing state. So the oil needs to be either trucked in from North Dakota, Canada, or Texas, which is tough even in the modern day, or brought in by tanker from Alaska. That adds some pain to the pump, but you'd think having refineries nearby would help a bit.
Well, it would, but one small problem, though: demand. There are more than 30 million vehicles on the road in California, more than any other state, and twice that even of Florida, which comes in second for the most cars. Also, California is not a tiny state, meaning that fuel still needs to be trucked from refineries to the gas stations, adding to the price.
Adding to California's gas woes is the gas taxes, some of the highest in the nation.
Cost Per Gallon: $4.07
Washington benefits from getting oil from the Montana and Utah pipeline, but that doesn't mean it necessarily has the capacity to keep up with the demand for gas from cities like Seattle, Tacoma, and Spokane, since there are only six refineries in the state. California, for contrast, has 20. As a result, they get dinged by higher prices...although at least they're not California.
Cost Per Gallon: $4.03
Oregon sits in a "sweet spot"; it's between two states with lots of refinery capacity and near one that ships out crude oil. Unfortunately, it's still dinged by shipping prices and basic demand, and it's not like the oil coming over the Rockies is magically cheaper. So they're still paying over $4 a gallon; they're just the best off of a bad lot.
So who's winning the gas price wars?
Cost Per Gallon: $3.50
Two things help Tennessee's gas prices: moderate demand, and proximity to states like Texas and Louisiana, with plenty of crude oil and refining capacity. The low gas taxes also help to moderate prices, but it's really that sweet spot of demand and access to various shipping routes, such as the Mississippi River, that keep its prices low.
Cost Per Gallon: $3.48
Kansas is another state that benefits by location: because it's on the way to the West Coast, gasoline tankers are stopping off there anyway. Also helping: being close to Oklahoma, which has lots of refineries and crude oil, and thus makes shipping costs a lot lower than other states.
Cost Per Gallon: $3.47
Another beneficiary of being close to Texas and Louisiana, Arkansas has an added advantage: an extremely low gas tax. In addition, Arkansas has low enough demand that most of its gas can come from its own two refineries, meaning the cost savings are passed on to the consumer.
#2) South Carolina
Cost Per Gallon: $3.44
South Carolina benefits from something very simple: there's plenty of supply nearby, but it only has moderate demand. Economics work in South Carolina's favor, especially since it's on the way to states with higher demand, making it cheaper to ship gas to South Carolina since, heck, they're going through anyway. A low gas tax also helps, putting South Carolina in the number two slot.
Cost Per Gallon: $3.42
No two ways about it, Oklahoma is blessed with cheap gas for multiple reasons. One, it's got crude oil of its own, as well as its own refinery capacity. Two, it shares a border with Texas, which is no slouch in the crude oil and refinery front itself. Three, it has some of the lowest gas taxes in the nation, which keeps prices nice and low. And four, it's got only moderate demand, so with the enormous supply, it has more than enough to meet demand.
How'd your state do? We've got a full chart, right here.
Tags: high gas prices, worst gas states, best gas states, gas summer 2012, gas crisis usa, safeauto, cheap insurance, safe auto insurance
Imagine if your car could travel 56 miles on a gallon of gas. You could cut your gasoline costs in half (at least). You would only have to fill up once a week (if that). You could drive from Boston to Cleveland without even stopping the car! And get this: If the Obama administration has its way, these dreams could come true by the time today's toddlers get their driver's licenses.
The president is pushing regulators to approve a plan which would require all automakers to maintain an average rating of 56 mpg for their vehicle offerings by 2025. That's about twice what today's vehicles are averaging.
Now, before you start doing cartwheels, let's take a closer look at this proposed standard. The 56 mpg figure is an average, meaning that only about half of the vehicles sold in the U.S. would meet that level of fuel economy. In addition, the rules would differentiate between smaller passenger cars and pickup trucks or SUVs. Vehicles in the latter category would only be required to meet a lower standard.
And there's more. The fuel mileage "rating" that automakers promote is actually much higher than what you'll see on new car window stickers. For instance, a rating of 56 mpg actually works out to about 35 to 40 mpg under actual driving conditions. Plus, automakers can earn "credits" toward meeting the standard by adapting certain automotive features. As an example, a car which contains a government-approved "clean" air conditioning system only has to reach a rating level of 50 mpg instead of 56 mpg.
Not surprisingly, auto manufacturers and trade groups oppose the Obama administration's new rules. They say that the regulations would penalize vehicle owners who need pickups or SUVs (like farmers and people with large families), force the auto industry into relying on hybrids and electric cars for most of their revenue, and jack up the average cost of new vehicles. And, as we all know, a rise in car prices is almost always accompanied by a rise in auto insurance rates. Even the Environmental Protection Agency admits that the proposed regulations would add several thousand dollars to the price tag of every new car, truck, or SUV.
So what would all this mean for you?
If the higher fuel standards are adopted, gas mileage in new vehicles would begin increasing quickly. That's because the regulations actually "stairstep" upward each year until 2025 (for example, the rating would be 29.5 mpg for 2012 model year vehicles). It stands to reason that vehicle price tags would also inch upward accordingly.
But there's no evidence that the new rules would cause automakers to abandon production of larger cars, SUVs, or pickups altogether - although the engines in these vehicles might shrink and become more fuel-efficient.
We'll know more by the end of September, when officials are due to release vehicle fuel standards for 2025. And there's always the possibility that during the next 14 years, lawmakers will pass legislation or automakers will request and receive waivers that will retard the progress toward the 56 mpg target. So there's no reason to start calculating future gas savings anytime soon.
If you need car insurance, check out SafeAuto.com.
Image credits: wired.com, flickr.com, sodahead.com.
Tags: safeauto, safe auto, gas mileage
Auto Insurance | gas
Do you remember the dramatic video of an SUV cornering and nearly falling over? Consumer Reports put that together back when SUVs were considered “death traps.” Car insurance rates went up for SUV-drivers as a result. But it seems that that time has come and gone, and now SUVs are the safest cars on the road.
The Insurance Institute for Highway Safety now says that SUVs are extremely safe, thanks to the addition of Electronic Stability Control (ESC). But how ironic; SUVs (also known as gas guzzlers) have been recognized as the safest cars, just in time for gas prices to go through the roof, and fuel-efficient, four-door minicars are among the most dangerous deathtraps. While SUVs average 28 deaths per 100,000, smaller cars average 82.
The common wisdom about SUVs turns out to be true: their size and weight does protect the driver in a crash. And, ironically, the size and popularity of SUVs are the problem for smaller cars: in collisions involving two or more cars, the death rate rose dramatically when a small car hit a larger one.
So, is it really a tradeoff? Can we only have safety if we're willing to pay for it? Can we only have fuel efficiency if we risk our necks? Fortunately, the answer to both questions is “no.” You can drive an SUV and still save on gas...well, somewhat, anyway. How?
At the end of the day, safety is fairly relative: car crashes are still unfortunately very common in the United States, and we all have to do our part to avoid being involved in them or causing them in the first place. If we all put safety first, the road will be a better place, no matter what we drive.
Tags: safe auto, safeauto, fuel efficiency, safe car
Auto Insurance | gas | Safety Tips
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