US gas prices increased by $1.11 per gallon — about 37% — from March to April while the global economy responded to the limited crude oil supply passing through the Strait of Hormuz. The average per-gallon price rose from $3.02 on March 2 to $4.12 on April 27, according to data from the Energy Information Administration (EIA).

But prices vary broadly by state. Californians, who are paying $5.79 at the average station as of the latest data, may not feel much sympathy for their Texan counterparts, who pay $3.66 (even after an increase of over a dollar locally, as well). Gas prices in California haven’t been that low in over five years.

So why the regional differences? The EIA says it’s everything from a region’s proximity to the supply to competition among local gas stations. Some factors — like supply disruptions — can be out of government’s (and even industry’s) control. But other factors are more directly in the hands of regional governments. Perhaps most directly: taxes.

When you fill up at the pump, your purchase is subject to multiple layers of taxation. A little over half of what you pay per gallon of gas covers the cost of the crude oil. Another 20% is refinery costs, and 11% is marketing and distribution. The remaining 18% is tax.

The federal government imposes a flat tax on all gas purchases. Congress raised this to 18.4 cents per gallon in 1993 and it hasn’t changed since.

Every state government and Washington, DC, levy their own per-gallon gasoline excise taxes. On top of any volume-based taxes, most states have general sales taxes that add some percentage of all purchases, including gas. Finally, state legislation sometimes includes additional fees for storage, inspection, environmental cleanup, or other considerations.

Diesel is taxed similarly — with a flat federal tax (24.4 cents/gallon), state excise and sales taxes, and any applicable additional fees. The difference is that the taxes tend to be heavier: In January 2026, diesel was being taxed at 60 cents per gallon overall, compared to 52 cents for regular.

Let’s take a closer look at how these different taxes play out in different states.

It’s worth noting that, aside from taxes, California is a perfect storm when it comes to gas prices. The state requires a particular blend of gasoline intended to improve air quality, but that gas uses more expensive components and extra steps in the refining process, which increases prices at the pump. It also has environmental compliance requirements that the California Energy Commission estimated in March 2025 could add as much as 54 cents per gallon. Plus, it’s far from Gulf Coast refineries, making it vulnerable to supply issues.

Taxes are a major revenue tool for governments at all levels, and, given our country’s reliance on gasoline for fuel, it is a common target for taxation. As state legislatures take varied approaches to taxing residents’ tanks, they can take scrutiny from the public and, ultimately, voters.