Q&A – Why Did Gas Prices Rise Faster in Florida Than the National Average? 

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Q&A – Why Did Gas Prices Rise Faster in Florida Than the National Average? 

Each day I feature a listener question sent by one of these methods.  

Email: brianmudd@iheartmedia.com 

Gettr, Parler & Twitter: @brianmuddradio 

iHeartRadio: Use the Talkback feature – the microphone button on our station’s page in the iHeart app.   

Today’s Entry: Hey Brian, seems gas prices in Florida are raising faster/higher than most states even New York and PA. Any thoughts why? 

Bottom Line: Perception and reality can be two different things. That said – you're on point that during the recent surge in gas prices to record highs in Florida, prices rose from slightly below the national average to above average. Over the past week we’ve regularly been sitting about two cents above the national average. Now, when you’re filling up – you're certainly not feeling as though you’re getting good regular value – but guess what... Floridians generally are when compared to other states. That is at least once you’ve accounted for imposed taxes on gas.  

I’ve previously illustrated Florida’s taxation on gas as being one of the few areas where we’re not a leader in having low taxation. The average total local and state gas taxes in Florida are the 11th highest nationally. If all other factors were equal, when comparing the price of gas in Florida compared to other states, we’d have the 11th most expensive gas nationally. Currently, Florida has the 17th highest average price of gas. That means despite the surge in prices, and prices averaging above the norms nationally, Florida’s gas prices are actually providing a relatively good value – with increases being below average given our rate of taxation. This is one of the of the examples of perception and reality can being a little skewed. That said, South Florida has the highest prices within the state of Florida – in large part due to Broward, Miami-Dade, Palm Beach County and Monroe imposing the highest gas taxes allowable under Florida law.  

Prices above state average:  

  • Monroe price – 17 cents 
  • Palm Beach County – 11 cents 
  • Broward – 5 cents 
  • Miami-Dade – 2 cents 

So, where you go even within South Florida matters significantly. Why’s that? Well, it has to due in part with all of the other variables, beyond state and local taxes, that are part of the 47% of what makes up the price of gas. On average 53% of the cost of a gallon of gas comes down to the price of oil. As for the remaining 47%... 

  • 21% - taxes  
  • 18% - transportation and retail margin  
  • 8% - refining 

We’ve already addressed taxes. But what about the transportation and refining costs? Those are huge variables here. Florida has very little oil production of its own (0.1% of all domestic oil is harvested here) and no refiners – or pipelines. This means all gas used in Florida is refined out-of-state and must be transported into our state. Pipelines are the most cost-efficient way to deliver energy. Without any, Florida is reliant on fuel being delivered through a combination of barges, rail, tankers and trucks. In Southeast Florida, our gas comes through Port Everglades. It’s like this. As fuel prices have surged across the board, it costs far more for the fuel used for transportation of gas into our state. States which receive gas through pipelines haven’t experienced the extra pricing pressures states like ours have as a result.  

You specifically referenced New York and Pennsylvania in comparison to Florida. Both states still have far higher gas prices than Florida currently, though you’re right that Florida’s rate of increase has been slightly higher than both. Both of those states have extensive gas pipelines which has limited the pressure on transportation costs during this surge. You may recall that last year during the Colonial Pipeline hack which led to widespread gas supply disruptions – we were spared because none of our fuel comes to Florida through pipelines. This year we’re not so lucky as we’re the 2nd most exposed state (Hawaii is first), to the pricing pressures of transportation costs for gas.  


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