If you've ever driven through Texas and noticed the gas prices, you know how much cheaper fuel is compared to states like California or New York. As of June 2026, the average price for regular unleaded gasoline in Texas is just $2.97 per gallon — nearly $1.47 below the national average of $4.44/gallon. But why exactly is gas so cheap in Texas? And where can you find the absolute lowest prices in the Lone Star State?
Texas average: $2.97/gallon · National average: $4.44/gallon · You save: $1.47/gallon · Rank: #4 cheapest state in the USA · Source: EIA.gov
Why is Gas So Cheap in Texas?
1. Texas is the Largest Oil Producer in the USA
Texas produces more crude oil than any other US state — and it's not even close. The Permian Basin in West Texas is one of the most productive oil fields in the entire world. This massive local oil production means Texas has an abundant, nearby supply of crude oil that feeds directly into its refineries, keeping costs low throughout the entire supply chain.
2. Texas Has the Largest Refinery Capacity in the Nation
The Gulf Coast region of Texas — particularly around Houston, Beaumont, and Port Arthur — is home to the largest concentration of oil refineries in the United States. Cities like Beaumont and Port Arthur have some of the lowest gas prices in the entire country because they are located literally next to major refineries. When the fuel doesn't have to travel far, distribution costs stay minimal.
3. Low State Fuel Tax
Texas charges just 20 cents per gallon in state fuel tax — one of the lowest rates in the country. Compare this to California's 68 cents per gallon or Pennsylvania's 59 cents, and you can see why Texas drivers pay so much less. The state's philosophy of low taxation extends to its fuel policy, directly benefiting millions of Texas drivers every day.
4. No Special Fuel Blend Requirements
Unlike California, which requires an expensive specially formulated gasoline blend, Texas uses standard fuel that can be produced by any refinery in the country. This means more competition, more supply options, and lower prices at the pump.
5. No Carbon Tax or Cap-and-Trade Program
Texas has no state carbon tax, cap-and-trade program, or low-carbon fuel standards — unlike California and Washington. These environmental fees can add 25-40 cents per gallon in states that have them. Texas drivers benefit from the absence of these additional costs.
Texas Gas Prices by Major City
While the state average is $2.97/gallon, prices vary across Texas cities:
Houston consistently has the lowest gas prices in Texas due to its proximity to Gulf Coast refineries. El Paso tends to be slightly higher because of its remote location in far West Texas, farther from the major refinery corridor.
Texas vs Other States — Gas Price Comparison
| State | Regular Price | Difference vs Texas |
|---|---|---|
| Louisiana | $2.72 | -$0.25 |
| Mississippi | $2.91 | -$0.06 |
| Texas | $2.97 | — |
| Florida | $3.29 | +$0.32 |
| National Average | $4.44 | +$1.47 |
| New York | $3.85 | +$0.88 |
| California | $5.97 | +$3.00 |
The difference between filling up in Texas vs California is $3.00 per gallon. For a 20-gallon truck tank, that's $60 more per fill-up in California than in Texas. Over a year of weekly fill-ups, a Californian pays about $3,120 more per year on gasoline than a comparable Texas driver.
Tips for Finding the Cheapest Gas in Texas
- Use GasBuddy — Download the free app and find the cheapest station near you anywhere in Texas
- Shop at HEB gas stations — Texas grocery chain HEB often has the lowest prices in their local markets
- Costco and Sam's Club — Texas has many Costco and Sam's Club locations with consistently low gas prices for members
- Fill up near Houston — If you're driving through the Houston area, gas is typically 5-10 cents cheaper than the statewide average
- Avoid airport areas — Gas near DFW, Houston IAH, and Austin-Bergstrom airports tends to be higher
Texas is a massive state — driving from El Paso to Houston is 750 miles, longer than crossing many entire countries. Use our free road trip calculator at usgasprices.online to calculate your exact fuel cost before you leave.
Will Texas Gas Prices Stay Low?
Texas gas prices are structurally low — meaning the factors that keep prices cheap (oil production, refinery capacity, low taxes) are deeply embedded and unlikely to change significantly. As long as Texas remains the top oil-producing state and maintains its low-tax policy, drivers in the Lone Star State will continue to enjoy some of the cheapest gasoline in the United States.
The main risks to Texas gas prices are global crude oil price increases and potential federal fuel regulations, both of which affect all states equally. Within the US, Texas will almost certainly remain one of the top 5 cheapest states for gasoline for the foreseeable future.
For the latest current Texas gas prices updated every Monday, visit our live gas price tracker powered by official EIA.gov data.