Pacific Northwest drivers are paying some of the highest gasoline prices in the country this week.

Washington state takes the No. 1 spot with an average of $4.66 per gallon of regular gas, according to the nonprofit American Automobile Association, better known as AAA. Oregon’s average is at $4.28, making it the fourth highest in the nation after Washington, California and Hawaii.

Gas prices hold a unique position in the American psyche when it comes to evaluating the health of the economy. In general, gasoline represents less than 5% of what an average household spends every month, according to the U.S. Department of Energy’s Energy Information Administration.

But because gas prices are listed in huge numbers visible from roadways, they often become a talking point among politicians and regular folks alike when discussing the economy. More so, even if individual drivers don’t see a big bump in their personal gas bill, high gas prices can drive up the cost of anything that needs transport – food, home goods, clothing.

West Coast states often have higher gas prices than the rest of the country. Experts say states like Oregon and Washington are especially vulnerable to price shocks that, on top of long-term price pressures like taxes, keep the bill at the pump above what drivers in other states pay.

This month, a major pipeline outage contributed to pushing up the price of gas in the two states. The outage on the 400-mile Olympic Pipeline came as some refineries were down for maintenance, and at the tail end of the summer fuel season.

Gas stations were able to start selling winter gasoline blends — which are cheaper and easier to produce — on Sept. 15.

“This turning point here, now allowing winter gasoline, is a massive shift that will very quickly improve the amount of supply available to the Pacific Northwest,” Patrick De Haan, head of petroleum analysis for fuel comparison site gasbuddy.com, told OPB.

“So no motorists should be in a rush to fill their tank: gas prices could fall 35 to 65 cents a gallon in the following, say, three to six weeks — so long as there are no new issues at the refineries.”

Here are some of the factors that continually lead to Oregon and Washington having relatively high gas prices:

1. Oregon and Washington sit in the top dozen states for highest state gas taxes.

California levies the highest taxes at the pump at 61 cents per gallon for state taxes as of July 2025, according to the Energy Information Administration. Washington state comes in at number four at 55 cents per gallon, and Oregon is 12th in the nation with a state tax of 40 cents per gallon.

State taxes are on top of the federal gasoline tax, which currently is 18 cents per gallon. In both Washington and Oregon, local municipalities may also have their own tax.

2. The Pacific Northwest has limited capacity to refine crude oil into gasoline.

Washington state has five refineries mostly located near the ports of Tacoma and Seattle. Oregon has no refineries and 90% of the gasoline sold in the state is refined in Washington.

Refineries tend to cluster around oil import terminals. After going through the refining process, gasoline is sent mostly via pipeline to storage and distribution hubs. Oregon’s fuel is primarily transported and sent via a major pipeline to hubs in Portland and Eugene, according to the Oregon Department of Energy. Gasoline can also be sent by boat and train, but pipelines tend to be most efficient. Once at the hubs, gasoline is often transferred to trucks and distributed to gas stations.

Refineries are expensive to build, expand and operate. The majority of the country’s around 130 refineries were built before the year 2000, according to the Energy Information Administration.

The West Coast typically has enough refining capacity to meet demand, according to DeHaan, but not much more than that.

“Over time — the last 5 or 10 years — the West Coast, you’ve seen higher prices generally because there’s no margin for error,” DeHaan said. “That is, there’s less supply in a market that’s demanding more, and that’s very problematic.”

When refineries shut down for planned or unplanned maintenance, basic economic principles mean prices go up: less supply meets the same amount of demand.

3. West Coast states have enacted policies to encourage alternatives to fossil fuels, which have consequently reduced incentives to expand gasoline production.

Meanwhile, DeHaan says policies in Washington and California have dissuaded investment in refineries. The last refinery built in Washington was in 1971 when Cherry Point (now owned by oil and gas giant BP) opened in Blaine.

Overall, policymakers made a bet that the transition away from fossil fuels and toward things like widespread use of electric vehicles would happen more quickly. To encourage the shift from fossil fuels — which scientists say is needed to avoid the most catastrophic effects of climate change — lawmakers have passed incentives for consumer adoption of electric vehicles.

But snags in building out a network of charging stations and the need for more high-voltage transmission lines across the country, among other factors, have slowed the adoption of EVs. (Side note: electric vehicles do not emit carbon or other greenhouse gases into the atmosphere while being driven. However, the electricity to power an EV is still in part generated by fossil fuels.)

Meanwhile, lawmakers have increased standards and regulations that make it even more expensive to expand gasoline production in the Pacific Northwest. DeHaan said even if companies were interested in adding refining capacity in the U.S., they might be more likely to turn to states like Texas that have fewer regulations, greater energy infrastructure and closer access to global crude oil markets.

“The West Coast has too few refineries, too many regulations, and a lot of taxes which generally lead to much higher prices than what we see in much of the rest of the country,” DeHaan said.

News Source : https://www.opb.org/article/2025/09/18/gas-prices-high-oregon-washington-pacific-northwest/