The daily life in the US experiences critical effects of fuel costs, which modify domestic spending plans and affect the running of organizational operations. Commute-related activities as well as company transportation management will both experience noticeable effects from varying fuel prices. On June 16th, 2022, California stood as the state with the most expensive weekly gasoline price since 2018 as residents were forced to pay $6.43 per gallon.
On 16th April, Wisconsin was the state with the lowest gas prices at $1.29 per gallon since 2018. But in 2025, which state will have the cheapest gas price? Knowing this information can help travelers and drivers save money. Businesses can also use this info to manage fuel costs and plan budgets. Not to mention, gas prices can hint at bigger economic trends, which we’ll share with you in this post. We’ll also talk about which state has the cheapest gas price, how this can impact its residents, and why there’s variation in gas prices by state!
Source: Gas prices US | Weekly gas price averages: 2018-2025
Gas Price Trends Across the United States in 2025
During 2025, the United States experienced decreasing fuel costs because oil expenses lowered and vehicles became more fuel-efficient. The national fuel price stands at $3.27 per gallon on April 3rd, 2025, making it the highest price point this year. But last week, it registered $3.13, while the yearly 2025 average stands at $3.10 per gallon.
You can also check the list of gas prices by year in the US from 1993-2025. The cheapest gas was on January 2 at $3.03. California had the highest gas prices among all states, averaging $4.94 on April 4, while Mississippi had the lowest at $2.76 on the same date.
Why Mississippi Has the Lowest Gas Prices in 2025?
Mississippi currently boasts the lowest gasoline price in all US states, standing at an average of $2.76 per gallon on April 4. A week ago, the price was at $2.65 per gallon.
Factors Contributing to Low Prices
There are many factors why Mississippi has the lowest gas prices in 2025. Here they are:
1. Proximity to Oil Refineries
Mississippi operates three refineries through which the state processes 394,000 barrels of crude oil/per day, which represents 2% of the US domestic refining ability. Another reason the state enjoys affordable gas prices is that its location is near Louisiana and Texas refineries.
This reduced transportation distance between oil sources and gas stations supports low gasoline prices. Besides, Mississippi maintains the 11th-biggest oil refinery in the United States, together with a substantial natural gas facility followed by an LNG terminal situated on its Gulf Coast.
2. Lower State Fuel Taxes
The state maintains competitive fuel tax rates across the nation, with $0.18 per gallon being applied to both gasoline and diesel fuel. Among US states, Mississippi sits at the second place for the lowest fuel taxes. Compared to these statistics, states like California charge as much as $0.68 per gallon.
Mississippi maintains low fuel taxes since it aims to provide consumers with more reasonable fuel prices. It avoids implementing surcharges for environment or infrastructure, commonly imposed by other states. Road and transportation projects in Mississippi receive funds from sales taxes and federal allocations instead of depending on fuel taxes.
3. Economic and Infrastructure Considerations
Mississippi is among the five states in the US with the lowest gas prices. The gas prices stay low partly because people there don’t use as much fuel. The state has fewer big cities and less traffic than places like California or New York. Thus, there’s less driving overall, and roads are less crowded.
Though Mississippi does have industries that use energy, transportation only makes up about a third of its energy use. This is less than in states where people drive a lot or rely heavily on public transit.
The state made progress in four different sectors, including bridges, dams, rail, and solid waste management, from 2020 to 2024, thus driving down gasoline costs. When infrastructure is strong, the expenses related to fuel operations decrease, which enables consumers to pay less at the pump.
Source: AAA Fuel Prices
Why Do Gas Prices Vary Between States?
Diesel fuel prices by state can differ due to several reasons. Knowing these factors helps explain why some states have higher gas prices at the pump than others:
1. Taxes
State-tax gains have substantial effects on gas costs. Among all state-imposed taxes, fuel prices include two main ones, which are excise taxes and sales taxes. At present, the average state gas revenue tax stands at 32 cents per gallon, yet individual tax amounts between states can differ. California leads the nation with the highest gasoline tax of 77.9 cents per gallon, existing since July 1, 2023.
This tax serves the upkeep and betterment of roads, bridges, and the public transportation infrastructure. The state fuel tax rates significantly differ between Mississippi’s 18.4-cent rate, which is much lower than other US states. As we mentioned above, this is because the government funds the Mississippi infrastructure.
2. Supply and Demand
Gas prices are also influenced by local demand. States with denser populations and more vehicle registration numbers need to pay higher gas prices to satisfy increased fuel market competition. For example, the numerous registered vehicles across California generate substantial fuel consumption that drives gas costs up when supply remains restricted.
Furthermore, if you reside in a state that imports fuel, you may wonder why there are no cheap gas prices near me. This is because the imported fuel supply can be more easily disrupted by international issues.
The market demand combined with restricted supply within these states leads to higher gasoline prices because of stagnated supplies. For instance, multiple refineries operate in California, yet they generate insufficient quantities of the distinctive gasoline product for the state. Gas prices within the state also experience spikes whenever one refinery faces operational problems because there exists no alternative supply system.
3. Transportation Costs
Gas prices at gas stations depend on the distance that refined oil needs to travel from refineries to distribution terminals. States that operate near major oil suppliers and refineries experience reduced transportation expenses, leading to reduced gas expenses. Whereas states farther away face higher costs, which are passed on to consumers.
However, the physical proximity to an oil refinery does not guarantee cheaper fuel prices at fuel stations. A refinery’s operational costs rely heavily on its size, geographical location to crude oil sources, and its market reach. For example, Washington maintained a $4.32 per gallon average gas price during 2024 even though its refining capacity exceeded 637,700 barrels daily.
4. Environment Policies
The government-set rules for pollution reduction lead to states enacting special fuel blend requirements. California Reformulated Gasoline (CaRFG) represents a unique blend of fuel that leads to unstable gas prices throughout the state. This is because the mix has limited availability beyond the state’s borders.
Conducting business following these set rules causes higher production and distribution expenses that consumers must pay. States that impose stronger cleaning standards on their fuel have higher gas prices than states without such stringent fuel regulations.
Source: 2023 State Gas Tax Rates
What Do Low Gas Prices Mean for Mississippi’s Residents?
The state of Mississippi receives two-fold advantages from its reduced fuel costs, meaning it benefits both its consumers and businesses. The following economic developments can occur when gas prices decrease:
1. Savings for Consumers
When gas prices decrease, Mississippi residents have more money for purchasing necessary items such as food, healthcare needs, and educational materials. Receiving additional money through lower fuel costs enables consumers to invest revenue in local businesses that strengthen the community economy and support new job creation.
2. Benefits for Local Businesses
The low cost of gas for businesses operating delivery and logistics services directly decreases their operational expenses. Furthermore, the lowered operating expenses provide businesses with better pricing options for their customers. The decrease in fuel spending also enables local transportation businesses to expand their profit margins, thus enabling investments for business and staff employment or premium service improvements.
3. Impact on Transportation and Logistics
The reduced expenses for fuel enable transportation businesses to function with greater efficiency. Thus, they can achieve speedier delivery times, higher service levels, and better customer satisfaction results. Local logistics companies can maintain lead positions against competitors from other states through cost reductions, which leads to increased contract acquisition and expanded market domination.
What to Expect for Gas Prices in Late 2025?
A decrease in U.S. gas prices is forecasted by GasBuddy for 2025. The forecast states that the national average price will decrease to $3.22 per gallon from the $3.33 per gallon average in 2024. Crude oil price reductions serve as the main factor behind this decline. Though market fluctuations will disrupt gasoline prices throughout the year, the cost will peak at $3.53 per gallon during April.
However, the overall gas price could face constraints due to seasonally adjusted price increases and reduced refinery production capacities. Geopolitical events alongside policy modifications, such as Mexican and Canadian crude oil import tariffs, are also expected to result in gas price fluctuations. In addition, gasoline prices will reach their yearly minimum of $2.89 per gallon when December 2025 arrives.
Furthermore, regional differences will exist. The cities located on the West Coast, such as Los Angeles and San Francisco, are expected to maintain fuel prices at $5 per gallon due to their existing fuel tax regulations. In short, the projected decline in American gas expenses will reach $12 billion less than in 2024. But gas prices may still be affected by elements such as extreme weather events and global supply chain disruption.
Key Takeaways
The state of Mississippi will remain having the lowest fuel costs because it houses oil refineries close by, while also having decreased fuel taxes and lower customer demand. Mississippi residents and businesses can benefit from regional fuel prices that drive economic expansion.
However, states that have enacted strict environmental policies, have more traffic, high consumer demand, and limited gas supply should expect continuously high gas costs. Overall, energy prices within the US will decrease, but the specific price movements depend on seasonal changes, geopolitical factors, and production from refineries.
You can find the detailed gasoline price information for all states in the US by Fuel Logic. It offers both fuel-saving advice and dependable fuel delivery services, which you should contact immediately.
FAQs
1. What are gas prices in New York right now?
The regular unleaded fuel price in New York stands at $3.14 now due to market dynamics, consumer demands, and supply chain practices.
2. How much is gas in NYC in 2025?
The current gasoline market in NYC charges $3.14 per gallon for regular gas, which is similar to the statewide figures.
3. What state has the highest gas tax in 2025?
California maintains the most expensive gasoline tax rate throughout the United States by charging $0.60 per gallon in 2025. The state’s financial requirements for transportation and environmental standards and public infrastructure development cause this high gasoline tax rate.
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