States that have eliminated their gas taxes, such as Georgia and Indiana, have among the lowest gas prices in the United States.
WASHINGTON — The national average for a regular gallon of gas was $4.564 on Thursday as millions of Americans prepare to travel by car to get to their Memorial Day destinations. That’s up about $1.38 from last year — a 43.4% increase.
According to the American Automobile Association, 39.1 million Americans will drive at least 50 miles away from home between Thursday and Monday, May 25.
While gas prices were higher, AAA noted that ticket prices for flights, when booked early, were lower than last year. An estimated 3.66 million people will fly on Memorial Day Weekend.
The higher prices are unlikely to slow down travelers, though. AAA expects about 100,000 more road trips this weekend.
The impact of the war in Iran:
Gas prices spiked after the United States and Israel began launching attacks on Iran at the end of February. Especially crucial in contributing to the increase was the closure of the Strait of Hormuz, a critical waterway largely controlled by Iran, that connects the oil-rich Persian Gulf countries of Kuwait, Iraq, Saudi Arabia, Qatar, Bahrain and the United Arab Emirates with the rest of the world.
While the President Donald Trump administration had initially hoped that a ceasefire agreement in April would open up trade in the Strait of Hormuz, blockades have continued, stranding more than 1,500 vessels from 87 countries in the Persian Gulf, according to the U.S. State Department.
Trump has repeatedly set deadlines for Tehran to open the strait, but then backed off. Earlier this month, Trump said the U.S. military would start guiding stranded ships through the strait. The next day, the president said he was pausing that effort to see if an agreement could be reached.
The impact of gas taxes:
Heeding impending Memorial Day travel, Georgia Gov. Brian Kemp suspended his state’s gas tax for another two weeks. The extension started on Wednesday and will last until June 3.
“As Georgia families prepare for the Memorial Day travel weekend, they should not feel blindsided by prices at the gas pump,” Kemp said last Friday while citing AAA’s travel forecast.
The temporary suspension of the gas tax, passed into law in March by the state legislature, had been set to expire on Tuesday. The law saves drivers 33.3 cents per gallon for gasoline and 37.3 cents for diesel.
Indiana was also in the middle of a gas tax suspension heading into Memorial Day weekend. Gov. Mike Braun extended the suspension of the state’s gas tax earlier this month, expanding the measure to include a halt on the 36-cent excise tax.
Georgia and Indiana had the second and third-cheapest gas prices out of any U.S. state on Thursday, with both states maintaining prices more than 50 cents below the national average.
Since the excise tax lift on May 8, Indiana’s gas prices have dropped by 49 cents, while the national average gas price has increased by two cents.
Contrasting also with its midwestern neighbors, Indiana’s prices were about $1 cheaper than those of its western neighbor, Illinois.
Mississippi had the lowest average regular gas prices at $4.017, meaning as of Thursday, every U.S. state had average prices above $4.
In both Indiana and Georgia, gas taxes go toward repairing state highways and local roads. In 2024, the Hoosier State collected more than $1 billion in revenue from the gas tax. Georgia collects more than $2 billion a year from its motor fuel tax.
Taxes are only one factor that influences how much the price of gas varies by state. While California leads the country in gas taxes and prices at $6.143 per gallon, the state with the third-highest gas prices, Hawaii, has some of the country’s lowest gas taxes.
Distance from refineries, the volume of gas the area goes through and alternate fuel options nearby also factor into the price of gas.
Highest average gas prices by state, as of Thursday:
- California: $6.143
- Washington: $5.788
- Hawaii: $5.646
- Oregon: $5.353
- Alaska & Nevada: $5.273
Lowest average gas prices by state:
- Mississippi: $4.017
- Georgia: $4.032
- Indiana: $4.048
- Louisiana: $4.057
- Texas: $4.092
For diesel prices, an even starker contrast
Diesel fuel costs stood at an average of $5.656 per gallon on Thursday. That’s about $2.10 higher than the cost of a gallon of diesel at this time last year.
When were the all-time highest average gas prices?
The record for the highest average price of a regular gallon of gas was set on June 14, 2022, with a national average of just over $5 during the early months of Russia’s invasion of Ukraine.