Why is gas cheap in Texas?
Texas drivers pay among the lowest gasoline prices in the country. The reason is straightforward: low state fuel taxes (just 20 cents per gallon, unchanged since 1991), no state cap-and-trade or low-carbon fuel program, no state-specific fuel blend, and the country's largest refining base, with direct pipeline access to Gulf Coast crude.
What you're paying for
Texas pays roughly $0.62 less per gallon than the U.S. average. Low taxes, ample refining, and pipeline access keep prices cheap.
Against its neighbors
Amber line marks the U.S. average of $3.38.
Price over time
Texas U.S. average
Texas, explained
Why is gas cheaper in Texas than in California?−
Texas-specific state policy adds about $0.28 per gallon to the pump price. California-specific factors add about $1.75. The difference comes from four channels: lower taxes ($0.20/gal in Texas vs $0.68 in California), no carbon programs (vs California's cap-and-trade and LCFS adding ~$0.50/gal), no special fuel blend (vs CARB's ~$0.10/gal), and no California-style market-structure premium.
How much is the Texas state gas tax?+
Texas's state excise tax on gasoline is 20.0 cents per gallon, the second-lowest in the country. The tax has not changed since 1991 and is not indexed to inflation, so its real value has eroded by about 50 percent over three decades.
How many refineries does Texas have?+
Texas has 28 operating refineries with combined crude distillation capacity of about 6.0 million barrels per day, roughly one-third of total U.S. refining capacity. Most are concentrated on the Gulf Coast (Houston, Port Arthur, Corpus Christi, Beaumont).
Are gas prices higher in Houston and Dallas because of federal rules?+
Yes, slightly. Both Houston and the Dallas-Fort Worth metroplex fall under the federal Reformulated Gasoline (RFG) program. RFG-blend gasoline costs about 7 to 8 cents per gallon more to produce than conventional gasoline.
Why does Oklahoma have cheaper gas than Texas?+
Oklahoma's combined excise and fees are slightly lower than Texas's, Oklahoma has no federal RFG-area cities (no Houston/Dallas equivalent), and slightly lower retail distribution costs. Both states have similar refining access and political environments.