You Will Never Guess the State With the Cheapest Gas

If you've only lived in one region of the United States, you might not realize just how big of a difference there can be when it comes to gas prices. In fact, you might be surprised to learn that the difference in the per-gallon average between the least and most expensive states is nearly $2.30 per gallon as of this writing.

With that in mind, here's where you can find the cheapest gas, and why it is so inexpensive in some places.

Why are gas prices different throughout the country?

As you'll see in the next section, gas prices can vary dramatically from one state to the next. There are some good reasons for it.

First, and most significant, is taxes. There are state and local taxes on gasoline, and these can vary widely. On the high end of the spectrum, California has an average state gas tax of $0.779 per gallon. On the other end, Alaska's gas tax is less than $0.09 per gallon. Not surprisingly, this has a lot to do with how much you pay at the pump.

In addition to taxes, there are some other factors that influence gas prices. According to the U.S. Energy Information Administration, here are some of the main contributing factors to the cost of gasoline:

• Distance from supply: It costs a lot of money to transport gas a long distance, so it could be cheaper right near a refinery compared with somewhere that is 200 miles away from the nearest supply source.
• Competition: If there are fewer gas stations in a specific area, it can cost more than in areas where stations are abundant.
• Environmental regulations: Some states require the use of reformulated gasoline to help reduce pollution, and this can make the gas cost more. Other locations restrict transportation and storage of gasoline, which can also add to the cost.

Where is gas the cheapest?

The national average price of a gallon of gasoline is approximately $3.66 as of April 30, according to AAA.

I won't keep you in suspense. The state with the cheapest gasoline is Mississippi, which has an average price of just under $3.10 per gallon. Colorado is very close, with a per-gallon price that also rounds to $3.10.

These aren't the only states with below-average gas prices. Oklahoma, Louisiana, and Arkansas all have average prices of less than $3.20 per gallon, and another seven states have gas that costs less than $3.30 per gallon.

If you're curious, California has the most expensive gas in the United States, with an average price of $5.39 per gallon. Six other states (Alaska, Hawaii, Washington, Oregon, Nevada, and Arizona) have gas prices in excess of $4.00 per gallon, as well.

To clarify, these are the average prices for regular gasoline (as opposed to mid-grade or premium).

The bottom line

Here's why this can be a big deal for your budget. The average American drives 14,263 miles per year, according to the Federal Highway Administration. And the average fuel economy of a new vehicle sold in the U.S. is about 25 miles per gallon.

A quick calculation shows that the average driver buys about 571 gallons of gas per year. If you were to buy that gas in California, you'd spend $3,078. In Mississippi, you'd pay $1,770 -- more than $1,300 less than in the Golden State.

Of course, gas prices are only one factor to consider when deciding where to live. Even other transportation-related costs like car insurance rates can vary widely. But the gas savings in a low-cost state can amount to more than you think.