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State profile · Texas

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.

#42 of 50Republican control−$0.37 vs U.S.
Average price · Jan–May 2026 $3.01/gal AAA regular-grade retail
National rank #42 of 50 states
vs national average −$0.37 11% below U.S. avg
5-year change +$0.63 since Jan–May 2021

What you're paying for

dollars per gallon, estimated June 2026
Base costs$2.73
Crude oil cost$1.74
Refining$0.48
Distribution & marketing$0.33
Federal excise tax$0.18
Texas policy adds$0.28
State excise tax$0.20
Federal RFG (Houston, DFW)$0.08
The takeaway

Texas pays roughly $0.62 less per gallon than the U.S. average. Low taxes, ample refining, and pipeline access keep prices cheap.

Policy environment
State excise tax20.0 ¢/gal · since 1991
Cap-and-trade on motor fuelNo
Low Carbon Fuel StandardNo
State-only fuel blendNo · federal blend
Federal RFG areasYes (Houston, DFW)
Refinery count28 (most in U.S.)
Pipeline accessYes · Gulf Coast hub
Crude oil producer rank#1 in U.S.
Political control
Today: Unified Republican
Governor + House + Senate, all R
Years D, 2001–2025: 0 of 25
Years R, 2001–2025: 23 of 25
Years split: 2 of 25
Red: unified R · Gray: split
How Texas compares

Against its neighbors

Amber line marks the U.S. average of $3.38.

#31   New Mexico
$3.19
#42   Texas
$3.01
#45   Louisiana
$2.99
#48   Arkansas
$2.96
#50   Oklahoma
$2.86
Ten-year history

Price over time

Texas  U.S. average

$1.79$2.55$3.30$4.05201720192021202320252026
Common questions

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.

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