Why are gas prices so high in Nevada?
Appeal Staff Writer
Drivers often complain that gas prices are high in Nevada – and they’re right.
The state has ranked in the top four for highest gas prices, according to a national automotive services company. For the last four months, Nevada average gas prices have outpaced the nation by more than 20 cents. Carson City average gas prices have been even higher, culminating in February with an average price of $2.62, which is 39 cents higher than the national average.
Those familiar with the business of gas prices often point to two main reasons, other than the price of crude oil and unrest in oil-producing nations.
“We pay some of the highest taxes on gas in the country,” said Michael Geeser, spokesman with AAA Nevada, which tracks gas prices as a service to drivers.
Gas taxes – the state’s chunk
Nevada is ranked seventh in the nation for highest gasoline taxes in 2006, according to a report compiled by the state of Washington.
Gas tax per gallon in Nevada is 52.21 cents, according to the Nevada Department of Transportation. New York comes in first with 60.1 cents. California is No. 3 with 58.5 cents.
The U.S. average is 45.5, said Geeser.
“Fifty cents is considerable when you add that on to a gallon of gas,” he said.
The state’s portion of that is 18.45 cents per gallon for road construction in a large state with a relatively low yet consistently growing population.
“Somebody has to pay to build all the roads and they are expensive,” said Russ Law, NDOT chief operations analysis engineer. “Right-of-way is more expensive than what it used to be. Construction costs have gone up 80 percent since the last fuel tax increase in 1992.”
The state gas tax increased from 12.65 cents to 17.65 cents, plus .75 allocated for petroleum discharge cleanup and .05 for imported gasoline inspection.
A few states – such as Alaska and Wyoming – pay for highways out of their general funds, so they have lower gas taxes.
“One reason gas taxes are high is we have a constitutionally protected highway fund, along with about 19 other states,” Law said.
That means all money for highways come from fuel taxes and registration fees. And these high gas taxes provide for some of the smoothest roads in the National Highway System, according to Federal Highway Administration statistics.
Carson City gets its share
On the local side, Carson City collects 15.35 cents per gallon, which is used for road construction projects and maintenance.
The city is spending a nickel of that on the Fairview Drive widening project. From April 1997 to July 2005, that nickel per gallon was pledged to NDOT to help pay for the Carson City freeway, which will connect to Highway 50 at the base of Spooner Summit in 2010.
The city has contributed $14.2 million to the freeway through that 5 cent pledge.
The rest goes toward things like repavings, equipment, snow plowing and worker salaries.
“It’s an expensive task – the street maintenance budget is $4 million a year,” said Nick Providenti, Carson City senior accounting manager.
Northern Nevada is served by oil refineries in the Bay area, so the cost of bringing the product in is passed on to the consumer.
Las Vegas generally has cheaper gas because it’s a less-expensive trip to bring the oil from the L.A. area.
Geeser, with AAA, said the U.S. hasn’t built a new refinery in the last 30 years. Why not build a new one, since the demand is there? Law said he believes demand is the reason why companies don’t build a new refinery.
“The population that refineries serve has increased, yet capacity has not,” he said. “There’s no incentive to (build more) because their getting such great prices.”
• Contact reporter Becky Bosshart at firstname.lastname@example.org or 881-1212.