The cost stack
A retail gallon is the sum of a handful of components. Four are roughly common to every state — the cost of crude oil, the cost of refining it, the cost of moving and selling it, and the federal excise tax. The rest is where states diverge: their own excise and sales taxes, and, in a few states, carbon programs and special fuel blends.
Pump price = Crude + Refining + Distribution + Federal tax + State taxes + Carbon programs + Blend premium
What drives the differences
Crude oil is priced globally, so it is nearly identical everywhere on a given day. The gap between a cheap state and an expensive one is almost entirely the last three terms: state taxes, carbon-pricing programs, and whether a state requires a cleaner — and harder to supply — gasoline blend.
Geography matters too. A state with many refineries and pipeline connections can replace lost supply quickly, so its prices are stable. An isolated market with a unique fuel spec — California is the textbook case — has no easy backup, so disruptions move the price sharply.
Data sources
The four-factor decomposition
Our primary regression analysis decomposes the unified-Democratic price premium into four identifiable factors: total state gasoline taxes, California's CARB blend, PADD refining region, and the federal Reformulated Gasoline program. Together these four account for about 68 percent of the cross-state price gap. The residual after all four is about $0.13 per gallon — small but statistically significant.
The Washington natural experiment
The cleanest causal-style estimate in the analysis is the Washington-only test. Dropping California and Oregon from the panel, the Low Carbon Fuel Standard / cap-and-trade indicator is identified primarily by Washington's January 2023 program turn-on. The pooled estimate is +$0.41 per gallon; the within-state estimate (with state fixed effects) is +$0.48 per gallon. A simple difference-in-differences arithmetic check yields +$0.49 per gallon. Three independent methods landing within eight cents of each other is strong corroboration.
Updates & caveats
Figures are refreshed monthly. Tax rates are statutory; carbon-program costs are estimated from recent credit and allowance prices and will move with those markets. The breakdowns are designed to be directionally accurate and comparable, not penny-precise. This is observational analysis — the results are correlations, not proven causal effects.