Why Are Gasoline Prices Higher in Some Regions Than in Others?

"Although price levels vary over time, average retail gasoline prices are often highest in certain States or regions. Besides taxes, there are other factors that contribute to regional and even local differences in gasoline prices:

Distance from Supply Usually Means Higher Gas Prices

Gas prices in San Francisco, California, in the summer of 2008, were the highest they have ever been without adjustment for inflation.

Source: Stock photography (copyrighted)

Retail gasoline prices tend to be higher the farther it is sold from the source of supply: ports, refineries, and pipeline and blending terminals. About 60% of the crude oil processed by U.S. refineries in 2011 was imported, with most transported by ocean tankers. The U.S. Gulf Coast was the source of about 23% of the gasoline produced in the United States in 2011 and the starting point for most major gasoline pipelines, so those States farther from the refineries will most likely have higher.."
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