On Tuesday, Kentucky Gov. Andy Beshear announced he would freeze his state’s gas tax.
WASHINGTON — The national average price of a gallon of regular gas rose by nearly 6 cents overnight, as tensions flare in the Strait of Hormuz and a tenuous ceasefire agreement between the United States and Iran is being tested.
The national average for a gallon of regular gasoline was $4.536 on Wednesday. According to the American Automobile Association, that’s up from $4.483 on Monday.
Diesel prices increased by nearly 2 cents per gallon to $5.674, about 14 cents away from a record high. The cost of a gallon of diesel was $2.13 cheaper just one year ago compared with Wednesday.
Kentucky freezes gas tax in response to climbing prices
On Tuesday, Kentucky Gov. Andy Beshear signed an executive order that would freeze his state’s gas tax, eliminating a hike that was scheduled to kick in this summer. Like the rest of the United States, the Bluegrass state has seen its prices rise since the start of the Iran war.
In March, Georgia Gov. Brian Kemp suspended the state’s 33-cent excise gas tax and a 37-cent diesel tax in response to rising prices amid the War in Iran. The 60-day tax suspension is scheduled to last until May 19.
In both Kentucky and Georgia, gas taxes go toward funds to repair highways and roads.
Earlier this week, Georgia had the lowest gas prices in the country. However, on Wednesday, AAA reported Georgia had the sixth-lowest average at $4.048 per gallon. On Tuesday, Oklahoma retook the lead as the state with the lowest gas prices at $3.962.
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, 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.
Which states have the most expensive gas?
California leads the country with the most expensive gas, according to AAA, where the average price for a gallon of regular fuel was $6.160 on Wednesday. Mono County, in rural California, has average gas prices of more than $7.
Just behind California were Washington ($5.747), Hawaii ($5.657), Oregon ($5.332) and Nevada ($5.233), all with gas prices above $5 per gallon.
Alaska joined the rest of its Pacific counterparts over the weekend. Regular gas prices in the Last Frontier stand at $5.188 per gallon.
The impact of the ceasefire and the Strait of Hormuz
The surging prices seemed to stabilize or even decrease for about two weeks, following a temporary ceasefire agreement between the U.S. and Iran that was indefinitely extended.
However, the Strait of Hormuz, a vital shipping route where roughly a fifth of the world’s oil passes, has effectively remained closed or extremely limited to passage due to dueling blockades by both countries. This volatility has greatly disrupted the global oil markets.
The main uncertainty for the global economy is where oil prices are heading because of the Iran war. Oil prices spurted higher early this week on worries that the war will keep the Strait of Hormuz closed for a long time. That would, in turn, keep oil tankers bottled up in the Persian Gulf rather than delivering crude to customers worldwide.
On Tuesday, Iranian state media implied that oil facilities in the United Arab Emirates could face attacks if the United States tries to circumvent Iran in the Strait of Hormuz.
Rising prices in the Great Lakes Region
Hovering just under $5 per gallon is most of the Great Lakes region. According to gas price tracker GasBuddy, states like Illinois, Ohio, Michigan and Indiana have seen the fastest increase in fuel prices in the past few weeks.
Patrick De Haan, a petroleum analyst at GasBuddy, said Monday that “refinery outages” in the Midwest have made increases more severe. However, De Haan notes that these issues have improved, which could soon offset prices.
Highest average gas prices by state:
- California: $6.160
- Washington: $5.747
- Hawaii: $5.657
- Oregon: $5.332
- Nevada: $5.233
Lowest average gas prices by state, as of Friday:
- Oklahoma: $3.962
- Mississippi: 3.970
- Louisiana: $3.993
- Arkansas: $4.005
- Texas: $4.043
Highest average gas prices ever?
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.
The highest recorded average gallon of diesel, $5.816, came just five days later on June 19, 2022.
The Associated Press contributed to some of the reporting in this article.