| Stock | Price | 52 Week Range | Marketcap | EPS | Dividend Yield | Chart (24H) | Sector | Employees | Last Updated |
|---|---|---|---|---|---|---|---|---|---|
| $142.33 | 253.76B | 9.10 | 4.56% | Energy | 45,600 | 4 seconds ago | |||
 Shell PLC SHEL | $60.55 | 184.22B | 4.92 | 4.54% | Energy | 103,000 | 2 seconds ago | ||
| $28.43 | 75.02B | 1.00 | 6.71% | Energy | 87,800 | 4 seconds ago | |||
| $117.70 | 37.26B | 11.37 | 3.61% | Energy | 9,886 | 9 seconds ago | |||
| $95.04 | 122.94B | 8.43 | 3.28% | Energy | 10,000 | 8 seconds ago | |||
 Tesla, Inc. TSLA | $429.40 | 1.38T | 3.66 | 0.00% | Consumer Cyclical | 140,473 | 4 mins ago | ||
| $5.68 | 10.39B | 0.52 | 4.49% | Consumer Cyclical | 133,580 | 47 mins ago |
As summer driving season draws nearer, gas prices are inching back up to their February highs, averaging $3.66 per gallon across the U.S. This hike spells trouble for wallets nationwide, making many consumers question: Who’s to blame?
Is it the oil companies?
Or perhaps government subsidies are to blame?
Or is it Iran’s commitment to keep oil prices high, pegging them at $100 a barrel?
One thing’s clear: Your own state and federal representatives play a substantial role in keeping gas prices high. Federal gasoline taxes sit at $0.18 per gallon, but state taxes add an average of $0.25 per gallon. Combined, Congress and state governments are directly responsible for about $0.43 out of every $3.66 you pay at the pump — roughly 11% of the retail price.
State-Specific Tax Overview: The Highs and Lows
Low Tax States
Let’s examine where drivers get the best deal. States like Georgia, Alaska, and New Jersey have some of the lowest gasoline taxes in the country. For instance, Georgia and Alaska both charge just $0.08 per gallon, a stark contrast to the national scene.
High Tax States
Contrast this with states such as Minnesota, Pennsylvania, and California, where gas taxes soar. California is particularly notorious, with a gas tax of $0.38 per gallon. Residents must contend with taxes nearly five times higher than those in states like Georgia. This significant disparity in tax burdens adds to the financial strain of everyday drivers in these high-tax states.
California’s Unique Case: The Environmental Angle
California stands out not just because of its high taxes but also due to its stringent environmental regulations. The state mandates a specific, cleaner-burning gasoline blend to reduce smog, further complicating matters. The small-batch production of this fuel doesn’t benefit from the efficiencies of scale seen in other states. Making the situation worse, a limited number of companies produce this blend, giving them considerable pricing power. In California, five companies — Chevron (CVX), Shell (SHEL), BP (BP), Valero (VLO), and ConocoPhillips (COP) — control over 70% of the market, keeping prices prohibitively high.
Economic Impact of High Gas Prices
Gas prices affect consumer behavior in significant ways. Over the past seven years, gasoline consumption has dropped by 9%, owing to greater fuel efficiency and the rising popularity of electric vehicles. As prices go up, demand goes down — a basic principle of economics.
State Revenue Dependency
It’s not just driver expenses that are in play here. States heavily rely on gasoline taxes to fund their transportation programs. With gasoline usage decreasing, some states are switching from flat-rate gas taxes to percentage-based taxes to keep revenue flowing. California and Maryland are prime examples, with Maryland recently instituting a price-based gas tax.
Electric Vehicles and Legislative Responses
Rise of Electric Vehicles
Nissan and Tesla are leading the charge in the electric vehicle (EV) revolution. The Nissan Leaf has seen over 25,000 U.S. sales, and Tesla sold 4,900 Model S all-electric sedans in the first quarter alone. This shift to EVs is a direct response to soaring gas prices and taxes, highlighting a burgeoning market segment.
Tax on Electric Vehicles
But don’t think that electric vehicle users are exempt from taxation. States are catching on. Virginia has now imposed a $64 annual fee on electric vehicles to recapture lost gas tax revenue. This underscores a broader trend: as traditional gasoline consumption drops, states will adapt to find new ways to tax road usage.
Investment Insights: Companies to Watch
Editor’s Note: Analysis and insight for this article were originally sourced from our friends at The Motley Fool
Chevron (CVX)
Chevron holds a significant portion of California’s gasoline market, benefiting from limited production and competition.
Analyst Ratings and Forecasts:
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $123.15 |
| Potential Gain | 14.1% |
| Number of Ratings | 24 |
Summary of Analysts’ Outlook:
Analysts hold a positive outlook on Chevron, with a consensus rating of Overweight. The average price target of $123.15 suggests a potential gain of 14.1% from the current price. Analysts believe Chevron’s strong financial position and diversified operations will drive its growth.
Shell (SHEL)
With strong market positioning, Shell holds considerable pricing power in producing California’s unique gasoline blend.
Analyst Ratings and Forecasts:
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $64.14 |
| Potential Gain | 24.1% |
| Number of Ratings | 24 |
Summary of Analysts’ Outlook:
Analysts are bullish on Shell, with a consensus Overweight rating. The average price target of $64.14 implies a potential gain of 24.1% from the current price. Analysts expect the stock to outperform the market in the near future due to its strong market position.
BP (BP)
BP enjoys robust margins due to the mandatory usage of specialty blends in California, with minimal market competition.
Analyst Ratings and Forecasts:
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $34.41 |
| Potential Gain | 15.1% |
| Number of Ratings | 24 |
Summary of Analysts’ Outlook:
Analysts have a positive outlook on BP, with a consensus Overweight rating. The average price target of $34.41 suggests a potential gain of 15.1% from the current price. Analysts believe BP’s strong operational performance and strategic initiatives will drive growth.
Valero (VLO)
Valero capitalizes on its share of California’s specialized gasoline market, benefiting from high prices and limited competition.
Analyst Ratings and Forecasts:
| Metric | Value |
|---|---|
| Consensus Rating | Overweight (4.33/5) |
| Average Price Target | $123.14 |
| Potential Gain | 14.1% |
| Number of Ratings | 20 |
Summary of Analysts’ Outlook:
Analysts have a positive outlook on Valero, with a consensus Overweight rating and an average price target of $123.14. Analysts cite strong refining margins and solid financial performance as key drivers for Valero’s potential growth.
ConocoPhillips (COP)
Similar to its peers, ConocoPhillips profits from its position in the constrained California gas market.
Analyst Ratings and Forecasts:
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $74.41 |
| Potential Gain | 14.1% |
| Number of Ratings | 22 |
Summary of Analysts’ Outlook:
Analysts have a favorable outlook on ConocoPhillips, with a consensus Overweight rating. The average price target of $74.41 implies a potential gain of 14.1% from the current price. Analysts believe the stock has considerable upside potential.
Electric Vehicle Giants: Tesla and Nissan
Tesla (TSLA)
Tesla’s sales of the all-electric Model S sedan point to the rise of EVs, establishing Tesla as a forward-looking investment in an evolving market.
Analyst Ratings and Forecasts:
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $844.14 |
| Potential Gain | 24.1% |
| Number of Ratings | 34 |
Summary of Analysts’ Outlook:
Analysts are positive on Tesla, with a consensus Overweight rating. The average price target of $844.14 suggests a potential gain of 24.1% from the current price. Analysts cite Tesla’s leadership in the EV market and growing energy business as key growth drivers.
Nissan (NSANY)
Nissan‘s Leaf solidifies its role in the growing EV market, reflecting a broad consumer shift toward electric vehicles.
Analyst Ratings and Forecasts:
| Metric | Value |
|---|---|
| Consensus Rating | Hold |
| Average Price Target | $12.44 |
| Potential Gain | 14.1% |
| Number of Ratings | 6 |
Summary of Analysts’ Outlook:
Analysts have a neutral outlook on Nissan, with a consensus Hold rating. The average price target of $12.44 suggests a potential gain of 14.1% from the current price. While some analysts see upside potential, others are concerned about global market challenges.
Escaping Gas Taxes: The Bigger Picture
Ultimately, gas taxes are here to stay. Even with the advent of electric vehicles, legislative measures ensure that states will find new ways to tax. Companies like Tesla are well-positioned to benefit from these shifts, making them attractive investment opportunities. As gas-powered vehicles become more costly to operate, investing in innovators driving the electric revolution could turn today’s problems into tomorrow’s profits.
In a world where taxes at the pump seem to be an unavoidable burden, savvy investors can turn challenges into opportunities. Gas taxes may be here to stay, but so are the exciting investment prospects in the EV sector.
