10 states where gas prices hit hard
The average price of gasoline has risen to $3.815 a gallon, according to the American Automobile Association. Four-dollar gas, as a national average, may only be a month away if crude oil stays above $105 and the Libyan conflict continues.
The international oil crisis also could worsen if political unrest boils over in Nigeria — the biggest petroleum producer in sub-Saharan Africa. Rebel attacks have shuttered oil operations there in the past.
Gas prices vary sharply from state to state. Regular unleaded fuel costs $4.17 per gallon in Alabama, while the price is below $3.50 in some other states. Part of the reason for these discrepancies is differing gas taxes, and another part has to do with the cost of transporting fuel.
Fuel costs cannot be considered in a vacuum when it comes to their effect on consumers. A household with an annual income of $250,000 may not be bothered much by $5 gas. But a household with an annual income of $35,000 could find $3.50 gas so expensive that cutbacks in other routine spending are necessary to offset the cost of driving.
24/7 Wall St. looked at factors that make gas more or less affordable by state. It examined the average price of gas, of course, but also considered conditions that influence how much the price of gas affects consumers. These included a state’s median household income, unemployment levels and the proportion of people there who live below the poverty line. A state that combines high gas prices, high unemployment and low median income is likely to be one where levels of consumer spending are threatened.
This analysis shows the extent to which the U.S. economy cannot be viewed simply as a whole — as an undifferentiated collection of 50 states. Whatever happens with the national economy, some states on this list, like Alabama or West Virginia, could be tipped back into local recessions by a combination of high gas prices and low wages.
Each of the states whose people can least afford gas has a different set of factors contributing to the effects of high fuel costs. However, much of what applies to one state could also apply to another: Gas prices will cause people to postpone vacations and defer daily expenses. Construction companies will suspend some of their activities. Businesses that deliver goods to homes or other businesses will try to raise their prices to offset their costs of transportation.
Some of the states on this list barely made it out of the last recession, if they did so at all. Some still have double-digit unemployment and high poverty levels. The sharp rise in gas prices becomes more severe for them each day.
10. Iowa
- Median income: $50,721 (21st-highest)
- Price of regular gasoline: $3.94 (8th-highest)
- Unemployment: 6.1% (6th-lowest)
- Below poverty line: 13.07% (16th-lowest)
High gas prices are causing pain across Iowa, which has the eighth-highest gas prices in the country. One sector having trouble dealing with these rising prices is public education. Gov. Terry Branstad announced projections of 0% spending growth for all Iowa schools for the next two years. School districts, however, cannot avoid spending more money for fuel. “We’re at the mercy of the market whenever we purchase (fuel),” said Bill Good, the chief operations officer of the Des Moines School District, according to Des Moines broadcaster KCCI. That increase at the pump means schools will have to make cuts in other parts of their budgets.
9. Ohio
- Median income: $45,879 (19th-lowest)
- Price of regular gasoline: $3.83 (17th-lowest)
- Unemployment: 9.2% (20th-highest)
- Below poverty line: 19% (16th-highest)
Gas prices in Ohio are affecting not only individual drivers but also industries that rely heavily on transportation and related services. One local news station noted that farmers, too, are taking a hit. Farmers need fuel to operate their equipment, and the costs of some essential agricultural supplies, such as fertilizer, are affected by oil and gas prices.
8. North Dakota
- Median income: $50,075 (23rd-highest)
- Price of regular gasoline: $3.97 (7th-highest)
- Unemployment: 3.7% (lowest)
- Below poverty line: 12.77% (15th-lowest)
North Dakota has the seventh-highest average gas prices in the country, at $3.97 a gallon — up 12.8 cents from March. Bismarck television station KFYR quoted the state tourism director, Sara Otte Coleman, as saying that “an increase in gas prices is [going to] hurt people’s discretionary income in general.” The North Dakota tourism industry, which seeks to sell travelers on the state’s wide-open spaces and natural beauty, may suffer as a result.
7. Florida
- Median income: $45,631 (15th-lowest)
- Price of regular gasoline: $3.82 (18th-lowest)
- Unemployment: 11.5% (2nd-highest)
- Below poverty line: 18.17% (18th-highest)
The state has the third-highest unemployment rate in the country — 11.5% — and that, in combination with high gas prices and a relatively low median income, is a recipe for pain among automobile users. The state’s average gas price is $3.82, the 18th-highest in the country, and its median income is $45,631, the 15th-lowest. As in other states, those who are looking for work or who have low incomes are being hurt the most by high gas prices. Some Floridians have turned to hybrid cars as a solution. A southwest Florida news station noted that hybrid cars have begun selling so quickly that there have been unexpected shortages in the state.
6. Kentucky
- Median income: $42,664 (8th-lowest)
- Price of regular gasoline: $3.80 (21st-lowest)
- Unemployment: 10.4% (6th-highest)
- Below poverty line: 22.67% (3rd-highest)
Kentucky is home to the ninth-lowest median income in the country, the sixth-highest unemployment rate and the third-highest percentage of the populace living below the poverty line. The national average for the increase in gas prices from last year is 28%. Gas prices in Kentucky during that span have increased 34%. Gas prices have also caused food prices to increase by 5.2% in the past three months, the highest quarterly increase in the past three years, according to the Kentucky Farm Bureau.
5. Michigan
- Median income: $45,994 (20th-lowest)
- Price of regular gasoline: $3.94 (9th-highest)
- Unemployment: 10.4% (6th-highest)
- Below poverty line: 19.07% (15th-highest)
Gas prices in Michigan are the ninth-highest in the country, which may worsen the state’s unemployment rate — already the country’s sixth-highest. One industry being affected is construction, which is struggling because of the rising cost of materials. Mike Ferraro, the president of Ferraro Builders Inc., was recently quoted by a northern Michigan TV station as saying, “We have to pass that along to some extent, and the difficulty is determining how much of this increase (in) expenses we can pass to the consumer versus how much we’re able to essentially absorb.”
4. North Carolina
- Median income: $41,906 (8th-lowest)
- Price of regular gasoline: $3.89 (11th-highest)
- Unemployment: 9.7% (12th-highest)
- Below poverty line: 20% (13th-highest)
North Carolina has the 11th-highest average gas price in the country. It also has the eighth-lowest median income. Those who make less money are being affected by gas prices in a number of ways. One local news organization reported on a man who has started working 12-hour days to pay for the gas he needs to commute to his job.
3. West Virginia
- Median income: $40,490 (5th-lowest)
- Price of regular gasoline: $3.88 (12th-highest)
- Unemployment: 9.4% (16th-highest)
- Below poverty line: 22.07% (5th-highest)
West Virginia has the fifth-lowest median income in the country, as well as the fifth-greatest percentage of its population below the poverty line. Wayne Waldeck, the chief executive officer of pizzeria operator Wal-bon Corp., said the company spends “thousands of dollars a week on gasoline for delivery trucks,” according to the Parkersburg News and Sentinel. The bite, he added, is getting harder. Across the state, companies hit by rising fuel costs are increasing what they charge to deliver goods — passing along the higher costs to consumers.
2. Indiana
- Median income: $44,305 (12th-lowest)
- Price of regular gasoline: $4.04 (4th-highest)
- Unemployment: 8.8% (24th-highest)
- Below poverty line: 17.57% (20th-highest)
With gas prices topping an average of $4 per gallon for the first time since 2008, Indiana currently has the fourth-highest gas prices in the country. One way some people reacted was to stage a one-day boycott. Greg Seiter of AAA Hoosier Motor Club told a local newspaper, “If past experiences are any indication, the $4 mark tends to move people in ways that other price levels don’t. . . . (Y)ou’re going to notice people cutting back on driving, sharing rides, shopping aggressively for gas prices and doing everything they can to save themselves a little money.”
1. Alabama
- Median income: $39,980 (3rd-lowest)
- Price of regular gasoline: $4.17 (3rd-highest)
- Unemployment: 9.3% (18th-highest)
- Below poverty line: 21.77% (6th-highest)
Alabama has the third-highest gas prices in the country and the third-lowest median income. Just under 22% of the state’s population lives below the poverty line — the sixth-greatest proportion among all states. Residents of the state’s Gulf Coast feel these prices pinching their wallets just a year after the big BP oil spill disrupted their lives. Tourist spots that were effectively shuttered last year by that environmental disaster will now have to handle a drop in tourist traffic due to high gasoline prices.
This article was reported by Douglas McIntyre and Charles Stockdale for MarketWatch.
Tags: gas, gas prices
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