If you've ever wondered why gas prices in Washington seem higher than in neighboring states, you're not alone. The price you see on the gas station sign is the result of multiple factors working together—from global oil markets to state-specific policies.
The Building Blocks of Fuel Prices
Crude Oil Costs
The largest component of any gallon of gas is the cost of crude oil itself. This price is determined by global supply and demand.
- OPEC production decisions
- Geopolitical events
- Global economic conditions
- Seasonal demand fluctuations
Refining Costs
Once crude oil reaches a refinery, it must be processed into usable gasoline or diesel. Washington relies heavily on West Coast refineries.
- Limited capacity compared to Gulf Coast facilities
- Special fuel blends for environmental compliance
- Periodic maintenance shutdowns affect supply
Transportation & Distribution
Getting fuel from the refinery to your local gas station involves multiple steps and costs.
- Pipeline transportation to distribution terminals
- Truck delivery to individual stations
- Storage and handling costs
Taxes & Fees
Washington has one of the highest fuel tax structures in the nation.
- Federal fuel tax: 18.4 cents per gallon
- State fuel tax: 49.4 cents per gallon
- Various environmental and administrative fees
Carbon Program Costs
Washington's Climate Commitment Act adds additional costs through environmental programs.
- Cap-and-Invest Program: Requires fuel suppliers to purchase carbon allowances
- Clean Fuel Standard: Mandates reductions in fuel carbon intensity
- Can add 40-50 cents or more per gallon
Retail Margins
Finally, the gas station itself takes a small margin—often just a few cents per gallon.
- Operating costs (rent, utilities, wages)
- Credit card processing fees
- Equipment maintenance
Why Washington Prices Differ
The combination of high state taxes and carbon program costs is the primary reason Washington consistently ranks among the most expensive states for gasoline. While crude oil costs are similar nationwide, these state-specific factors add significantly to the final price.
~$0.68
State & Federal Taxes
~$0.50
Carbon Programs
+$0.95
Above National Avg
What Can Consumers Do?
While you can't control global oil prices or state policy, there are steps you can take:
Use apps like GasBuddy to find the best local prices
Consider fuel-efficient driving habits
Plan trips to combine errands and reduce overall fuel consumption
Stay informed about policy changes that may affect prices