Chart: Gasoline taxes in the US

(Published May 26, 2015)

Taxation of transport fuels in the United States reflects the multiple levels of governance in this country. On the one hand, there is the uniform federal tax burden (mainly from the excise duty) imposed across all states and on all retail sales. In 2015 the total federal tax rate on gasoline amounts to 18.4 US cents per gallon. In contrast, the rate on diesel is notably higher (24.4 cents per gallon).

On the other hand, there is a plethora of different state, county and local taxes which vary substantially. Different state taxes may include environmental surcharges (such as the fee charged for the Coastal and Inland Surface Oil Clean-up Fund in Maine and the Oil Spill Administration Tax in Washington State) or various sales, consumption and service fees. They reflect local political preferences as well as natural resource endowments. For example, oil-rich Alaska, much like some petrostates in the developing world, levies very low taxes on gasoline and for a year between 2008 and 2009 it did not apply any fuel taxation.

Here the chart illustrates the variety in state tax rates. The average total state tax on gasoline is 26.9 cents per gallon, slightly lower than the average for diesel (27.7 cents per gallon). Our calculations show that the variation of state gasoline taxes across states is as much as 30.35%, i.e. state taxes can be that much above or below the average of 26.9 cents per gallon.

The US territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the US Virgin Islands (not shown in the chart above) also levy some sort of state taxation but are exempt from federal excise.

Diverging state taxes contribute to the high variation in gasoline prices across the US. According to our calculations, US pump prices fluctuate by around 8.7% from the average rate (as measured in May 2015), by far the highest variation among developed nations.

To check the latest pump prices of gasoline in the US and North America please visit this page.

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