According to Insurance.com, the most expensive states for gasoline prices in 2004 are: 1. Hawaii 2. Alaska 3. California 4. New York 5. Nevada 6. Oregon 7. Connecticut 8. Idaho 9. District of Columbia 10. Washington Why are these state´s gas prices the highest? Taxes. Federal, State, and local taxes are a large component of the retail price of gasoline. Taxes, even without county and local taxes considered, account for approximately 27% of the cost of a gallon of gasoline. Federal excise taxes are 18.4¢ per gallon and State excise taxes average about 21¢ per gallon. The 21¢ per gallon is an average figure, meaning some states are adding more tax, and others are adding less. Some states, such as Hawaii, which are far from the refineries, pay more due to additional transportation cost. And residents of California are saddled with expensive gasoline because the State operates its own reformulated gasoline program with more stringent requirements than federally-mandated clean gasoline. California prices are more variable than others because there are relatively few supply sources of its unique blend of gasoline outside the State. Americans still have it pretty good. Europeans pay an average price of $5.25 per gallon of gasoline, a large part of which is, you guessed it—tax.