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Tax Refunds Are Getting Eaten by Gas Prices - 10 States Paying the Most for Gas Prices

Rising gas prices are cutting into tax refunds for Americans.

By Jordan Major , Edited by Laura Hohenstein

Updated April 16, 2026

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Tax refunds are landing in bank accounts across the country, but for many Americans, that extra cash may not go as far as expected.

Gas prices have surged in recent weeks, cutting into household budgets just as refunds are arriving. As of April 9, the national average price for gasoline has climbed to $4.16 per gallon, marking the first time in four years that prices have crossed the $4 threshold.

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Why gas prices are rising so quickly

Ongoing conflict in the Middle East has disrupted oil markets, pushing prices higher and creating volatility in supply. Drivers across the U.S. are now paying significantly more to fill up.

What stands out is how quickly prices have risen. Prices have jumped roughly 39% in just five weeks, rising from $2.98 to $4.16 per gallon, making it one of the sharpest short-term increases in decades.

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Tax season

This year, average tax refunds are higher than last year, but rising fuel costs are quickly offsetting those gains. Many households are now seeing that extra money go toward essential expenses rather than discretionary spending.

Gas is one of the most immediate and unavoidable costs. When prices rise sharply, the effect shows up right away in weekly budgets. As a result, refunds may feel smaller in practice, even if they are larger on paper.

Where gas prices are hitting hardest

While the national average sits at $4.16, drivers in some states are paying far more than that. The highest prices are heavily concentrated in the West, where a mix of taxes, environmental regulations, and supply constraints continues to push costs higher. Below are the 10 states where gas is currently most expensive as of April.

California

Gas prices in California remain the highest in the country by a wide margin, with average prices climbing to $5.89 per gallon. The state's higher fuel taxes, stricter environmental standards, and limited refining capacity all contribute to elevated costs.

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Hawaii

Hawaii consistently ranks near the top due to its geographic isolation, with prices around $5.50 per gallon. Because fuel must be shipped to the islands, transportation costs are built into every gallon. That makes Hawaii especially vulnerable to global price swings, which tend to show up quickly at the pump.

Washington

In Washington, gas prices are among the highest in the country, with gas averaging around $5.36 per gallon. Recent increases in state fuel policies and carbon-related costs have added upward pressure on prices. For households already dealing with higher living costs in cities like Seattle, the jump in gas prices is adding another layer of financial pressure.

Oregon

In Oregon, gas prices are hovering near $4.96 per gallon, placing it firmly among the highest in the country. Limited pipeline infrastructure and regional supply factors help keep prices elevated.

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Nevada

Nevada drivers are paying roughly $4.94 per gallon, with prices often higher in metro areas like Las Vegas. The state's reliance on fuel imports from neighboring regions makes it sensitive to supply disruptions, which have contributed to recent increases.

Arizona

Arizona has seen some of the fastest recent increases, with prices now around $4.68 per gallon. Proximity to California's fuel market and regional supply dynamics tend to push prices higher, especially during periods of volatility.

Alaska

Despite being a major oil-producing state, Alaska still faces high gas prices, averaging about $4.59 per gallon. Distribution challenges and geographic factors drive up costs, particularly in more remote areas where transportation adds significantly to pricing.

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Illinois

Illinois stands out as one of the most expensive states outside the West, with prices around $4.26 per gallon. A combination of higher state taxes and regional supply factors keeps costs above the national average, especially in and around Chicago.

Idaho

Idaho's average gas price is approaching $4.26 per gallon, placing it among the top 10 highest in the country. Its inland location and reliance on fuel shipments from other states contribute to higher costs compared to the national average.

Florida

Florida replaces Washington, D.C. on the list in April, with gas prices averaging just under $4.23 per gallon. Strong demand, tourism, and regional supply logistics all contribute to keeping prices elevated relative to much of the country.

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How this affects your refund in real terms

The impact of higher gas prices adds up faster than many people expect. A driver using about 15 gallons per week would now spend roughly $62 per fill-up at the national average. Just weeks ago, that same fill-up cost closer to $45.

The increase comes to about $17 per week, or nearly $70 per month. Over the course of a year, that adds up to more than $800 in additional fuel costs for a typical driver. A $3,600 tax refund could see a large portion absorbed by higher gas expenses alone.

Why Americans are paying attention

According to a recent Pew Research Center survey, rising fuel costs are the top financial concern linked to current global events, ranking above other impacts of the war.

About 69% of Americans say rising fuel costs are their biggest concern tied to current global events, with nearly half describing themselves as extremely concerned.

The financial impact is already adding up. Drivers have spent an estimated $10 billion more on gasoline over the past several weeks.

Bottom line

Tax refunds may be higher this year, but rising gas prices are quickly reducing their impact. With the national average now above $4 per gallon and significantly higher in some states, extra cash doesn't stretch as far as it once did.

Even when refunds increase, rising everyday costs are pushing up the cost of living, canceling out much of that benefit and leaving many households feeling like they're treading water.

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