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These are the 10 States With the Cheapest Gas

"Concerns of yet another global recession have caused oil prices to drop, and with them, gas prices."

Gas prices are falling. In fact, they have declined to lows not seen in months. Concerns of yet another global recession have caused oil prices to drop, and with them, gas prices. In the U.S., prices of regular unleaded gasoline have fallen more than 50 cents per gallon since May, when the cost hovered near $4.00.

Still, gas prices vary widely between states—from $4.24 a gallon in Hawaii to $3.13 in Missouri, according to AAA. 24/7 Wall St. set out to find the states with the lowest gas prices and the possible reasons behind them.

Fuel has dropped by nearly a cent every day for the past four weeks, the New York Times reports. In some states, prices have fallen more than the national average, and in some regions, they have even fallen below $3.00 per gallon. Several factors affect gas prices depending on the state, but the main ones are gas taxes, the presence of nearby refineries, and the state’s cost of living.

The Tax Foundation reports that some states, including California and New York, have gas tax rates of nearly 50 cents per gallon. Other states, including South Carolina and Oklahoma, have a tax of less than 20 cents. While there are some exceptions, notably Indiana, most of the states with low gas tax rates also have low gas prices.

The presence of refineries within the state also appears to have a significant impact on gas prices. Texas, Oklahoma, and Louisiana are home to the vast majority of the nation’s fuel processing plants, and prices are notably lower in these states, possibly due to lower transportation costs.

The exception to this rule is California, which has the second most refineries in the country, but also has one of the highest average gas prices of $3.82. This is likely due in part to its gas tax rate, which is the highest in the country.

The final factor affecting state and regional gas prices is how much people can afford to pay. There is a high correlation between states with low median household incomes and states with low gas prices. The prices residents can afford to pay, in turn, affects the state’s cost of living.

In order to identify the states with the lowest gas prices, 24/7 Wall St. used AAA’s Daily Fuel Gauge Report, which presents the most recent statewide average price per gallon (PPG) regular gasoline. To find how many refineries each state has, data was gathered from the Energy Information Administration list of the major refineries in the U.S.

Median household income (MHI) data was obtained from the U.S. Census Bureau and state gas taxes from The Tax Foundation. Finally, the Missouri Department of Economic Development calculations were used to identify the cost of living in each state.

Georgia

PPG, regular: $3.25

Cost of living: 16th lowest

MHI: $44,108 (12th lowest)

Tax per gallon: 20 cents

Georgia’s current average gas price is just $3.25, same as Kentucky and Indiana. In July, the state’s prices were almost on par with the national average, but have since dropped faster than the national level. Georgia has one of the lowest relative costs of living in the country, as well as a median household income of just $44,108, the 12th lowest in the country.

Kentucky

PPG, regular: $3.25

Cost of living: 6th lowest

MHI: $41,236 (6th lowest)

Tax per gallon: 22 cents

Kentucky has both the sixth lowest median household income in the country and the sixth lowest cost of living. Its gas prices are similarly low. While the state only has two refineries, this is more than the majority of states.

Indiana

PPG, regular: $3.25

Cost of living: 7th lowest

MHI: $46,322 (19th lowest)

Tax per gallon: 37 cents

According to the Missouri Department of Economic Development, Indiana has the seventh lowest relative cost of living in the country. Indiana has two refineries, including a BP plant in Whiting, which is the seventh largest in the country and the 19th largest in the world. According to The Indy Channel, the state’s current average gas price of $3.25 is a full dollar less than the Indiana all-time high of $4.25. The news source also reports that gas prices have declined in the state by more than 50 cents in the past month.

Oklahoma

PPG, regular: $3.24

Cost of living: the lowest

MHI: $43,400 (10th lowest)

Tax per gallon: 17 cents

Oklahoma has the absolute lowest cost of living in the country. Gas prices are similarly low. They have been exceptionally low lately, dropping below $3.00 per gallon in some areas. Oklahoma has six instate oil refineries. This is an exceptional amount compared to other states, especially considering Oklahoma’s relatively small size.

Louisiana

PPG, regular: $3.23

Cost of living: 17th lowest

MHI: $39,443 (4th lowest)

Tax per gallon: 20 cents

Its location on the Gulf of Mexico makes Louisiana an ideal location for refineries. With 17 plants, Louisiana has the third-most refineries in the country, and easily the most per square mile. The ExxonMobil plant in Baton Rouge is the second largest in the U.S. and the 10th largest in the world. Louisiana’s gas prices are also depressed by its economy. The state currently has the fourth lowest median income in the U.S.

Texas

PPG, regular: $3.22

Cost of living: 2nd lowest

MHI: $47,464 (23rd lowest)

Tax per gallon: 20 cents

Like Louisiana, Texas’s location on the Gulf of Mexico makes it also an ideal location for refineries, of which it has the most in the country — 23. The state also has the second lowest cost of living, behind only Oklahoma. The state’s gas prices have consistently remained below the national average. Recently, Fort Worth has had the lowest prices in the state at $3.14 per gallon.

Tennessee

PPG, regular: $3.20

Cost of living: 3rd lowest

MHI: $38,686 (3rd lowest)

Tax per gallon: 21 cents

Tennessee has the third lowest cost of living in the country, according to the Missouri Department of Economic Development. The state is also one of the poorest in the country, with a median income of just $38,686. Since peaking in May at $3.73, the state’s average gas price has dropped more than 50 cents.

See The Rest of The List Here:

(Michael B. Sauter, Charles B. Stockdale/Becket Adams--24/7 Wall St./The Blaze)

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