The federal excise duty on gasoline in the United States is 18.4 cents per gallon, while diesel fuel is 24.4 cents per gallon. The federal income tax was last increased on October 1, 1993, and it is not indexed to inflation, which climbed by 93 percent between 1993 and 2022. State and local taxes and levies add 34.24 cents to gasoline and 35.89 cents to diesel, resulting in a total US volume-weighted average fuel tax of 52.64 cents per gallon for gas and 60.29 cents per gallon for diesel as of April 2019.
Which state levies the highest gasoline tax?
California has the highest gasoline tax rate in the country. California’s gas tax was 68 U.S. cents per gallon in March 2022, compared to a total gas price of 5.79 U.S. dollars a gallon. Meanwhile, Alaska had the lowest gas tax of any US state in 2021, at 14 cents.
What is the government’s profit margin on a gallon of gas?
- Gas taxes are levied by the federal and state governments to help fund road maintenance projects.
- The average state gas tax is around 30 cents per gallon, however it varies from less than 10 cents to approximately 60 cents.
- Because many tax rates do not change with inflation and cars are getting more fuel-efficient, not enough revenue from gas taxes is being raised to fund infrastructure expenses.
Which state has the lowest per-gallon gas tax?
Every state, as well as the federal government, imposes a tax on the price of gasoline. Since 1993, the federal gasoline tax has been 18.4 cents per gallon. As of February 2021, the average state gasoline tax is at 19.0 cents per gallon. Which states have the most expensive gasoline? Which state has the lowest tax rate?
California had the highest effective gas tax as of January 2021, followed by Pennsylvania, Illinois, New Jersey, and Nevada. The graph below shows the ten states with the highest gasoline tax rates.
Which states have the cheapest gas prices? The states with the lowest effective gas tax rates are Alaska, Missouri, Mississippi, New Mexico, and Arizona. The ten states with the lowest gas taxes are shown in the graph below.
Virginia, for example, indexes its gasoline tax to inflation. Maryland, for example, has stopped its gas tax. Other states are also contemplating repealing the tax.
What factors influence the retail price of gasoline? The cost of oil, the cost of refining, the cost of delivering gasoline, and the amount of federal and state taxes are the most critical considerations. Everything else is merely incidental. While politicians can limit drilling on federal territory and refiners can change the cost of refining, the four reasons stated are more important.
What is the federal tax rate on gasoline?
The following are the taxes and additional levies on retail gasoline and diesel fuel as of January 1, 2022, in cents per gallon:
Excise taxes of 18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel fuel, as well as a Leaking Underground Storage Tank cost of 0.1 cents per gallon on both fuels, are levied by the federal government. State taxes cover a wide range of rates, including excise taxes, environmental taxes, special taxes, and inspection fees, but do not include state taxes based on gross or net receipts. County and municipal taxes are not included in state taxes. This information is provided solely for educational reasons.
For further information, go to:
Federal and state-level taxes on motor gasoline, diesel fuel, aviation gasoline, and jet fuel are included in state-by-state fuel taxes.
The Federal Highway Administration’s Highway Statistics Series contains historical federal and state taxes. Tables in the 2020 version include:
- 8.2.1. Motor fuel and lubricating oil excise taxes in the United States
- 8.2.3. Motor fuel tax rates by state
- 8.4.6. Motor fuel tax rates by state
Other FAQs about Prices
- Why is diesel fuel more expensive than gasoline?
- How much does a gallon of gasoline and a gallon of diesel fuel cost?
- Is it true that the EIA publishes inflation-adjusted gasoline and diesel prices?
- Is it true that the EIA publishes off-road diesel fuel prices?
- Are the EIA’s prices adjusted for inflation?
- What do I get for my money when I buy a gallon of gasoline or diesel fuel?
- What resources are available to assist me in paying my utility bills?
- Is there data on ethanol prices at the EIA?
- What is the formula for calculating diesel fuel surcharges?
- What do you think the price of home heating fuel will be this winter?
- How much does it cost to produce electricity using various power plants?
- Is data on electric utility rates, tariffs, and demand charges published by the EIA?
- Is there a database of historical fuel prices for each state at the EIA?
- What are the forecasts for gasoline and diesel prices in the United States?
- What should I budget for heating this winter?
- Is the EIA able to provide data on energy use and prices for cities, counties, or zip codes?
- What are the differences between Ccf, Mcf, Btu, and therms? What is the best way to convert natural gas costs from dollars per Ccf or Mcf to dollars per Btu or therm?
- How can I compare the prices of different heating fuels?
- Does the EIA provide state-by-state estimates or projections for energy output, consumption, and prices?
- Is data on peak or hourly electricity generation, demand, and prices available from the EIA?
- Is it true that the EIA publishes coking coal prices?
- Is it true that the EIA publishes gas prices by city, county, or zip code?
- Why am I paying more for heating oil or propane than what is listed on the EIA website?
- What is the cost of natural gas for electric power generators in the United States?
- Is the EIA able to provide statistics on power sales and prices by state and utility?
- What are the different coal prices that the EIA publishes?
Who in the world spends the most for gas?
According to AAA, the average national price per gallon of gas in the United States is currently $4.11.
- Hong Kong is a city in Hong Kong. With an average price of $10.87 per gallon of gas, the special administrative regional city near China’s mainland is at the top of the list.
- Central African Republic is a country in Africa.
What is the profit margin on a gallon of gas for the oil companies?
The typical markup on a gallon of gas is 30 cents, while retailers’ net profits are roughly 10 cents per gallon after expenses, including credit card fees, which can be 10 cents or more per gallon. Selling fuel as a convenience shop can be a lucrative business.
What is the gasoline profit margin?
Gasoline’s gross margin (or markup) in 2021 was 30.9 cents per gallon, or 10.2 percent of the year’s average price of $3.03. Retail gross margins have averaged 27.2 cents per gallon, or 10.7% of the total price, over the last five years.
How much does a gallon of gasoline cost to produce?
The process of refining crude oil into gasoline and diesel is known as refining. The cost of refining varies depending on the standards of the finished product and the additives used to improve it. Summer gasoline, for example, has low evaporation rates, which are essential to reduce excessive air pollution. Furthermore, gasoline is produced in a variety of power and performance levels known as octanes (i.e. 87, 89, and 93). The higher the octane, the higher the manufacturing cost. Detergents have been added to both gasoline and diesel to clean engines and improve performance. These additions also raise the price. Depending on whether summer or winter formulae are used, the cost of refining gasoline ranges from $.40 to $.70 per gallon. The cost of refining gasoline is $.60 per gallon in the case above. Diesel refinement costs $.49 per gallon.
What state doesn’t have a gas tax?
Alaska is one of only five states that does not have a state sales tax. Local governments, on the other hand, can charge sales taxes up to 7.5 percent. In areas where there is no property tax, rates are higher. The statewide average, according to the Tax Foundation, is only 1.76 percent.
Tobacco Excise Taxes:
- $2 for a pack of cigarettes. Many municipalities impose high fees; Juneau’s is $3 per pack.
- 75 percent of the wholesale price for all other tobacco products
- There is no statewide tax on vapor goods, although numerous municipalities do.
The Alaska State Tax Guide for Middle-Class Families has more information on various state taxes.
Connecticut
Connecticut voters approved a three-month suspension of its 25-cent per gallon gas tax, which will begin on April 1 and finish on June 30. Based on the average number of miles Connecticut residents drive according to 2020 data from the Federal Highway Administration (FHWA), the American average of cars getting 24 miles per gallon, and the average price of gas in Connecticut around the time the holiday was announced, the sales tax holiday could save drivers around $34.
Georgia
The state gas tax in Georgia has been frozen since March 18 and will stay so until May 31. The suspension eliminates a motor fuel tax of 29.1 cents per gallon. Based on the average number of miles Georgia drivers drive per year (according to 2020 data from the FHWA), the American average of cars getting 24 miles per gallon, and the average price of gas in Georgia around the time the holiday was announced, the sales tax holiday could save Georgia drivers about $23.
Maryland
The gas tax holiday in Maryland began on March 18 and will last for 30 days, ending on April 16. The 36.1 cents per gallon motor fuel tax is exempt from the tax suspension. Maryland’s average gas price is $3.78 per gallon, about a dollar higher than this time last year. Based on the average number of miles Maryland residents travel (according to 2020 statistics from the FWHA) and the American average of cars getting 24 miles per gallon, the sales tax holiday may save Maryland drivers roughly $14.
New York
The gas tax break in New York will begin on June 1 and extend until the end of the year. The 16 cents per gallon motor fuel tax has been suspended. Based on the average number of miles New Yorkers drive (according to 2020 data from the FWHA), the American average of cars getting 24 miles per gallon, and the average price of gas per gallon in New York around the time the holiday was announced, the sales tax holiday could save the average New York driver about $28.