Sunday, January 25, 2015

Oil Prices Force Russia Into Evasive Action



Russia will have to rewrite its budget after oil prices have cost the government $21 billion in the last few months alone.

The budget redo is good news for investors worried that Russia might, in a worse case scenario, default on its debts. While that is out of the question, according to moderate Prime Minister Dmitry Medvedev, what is not out of the question is oil’s erosion of the Russian government’s checking account. And the general fragility of the Russian economy on account of weak oil prices. Nearly 70% of Russian export revenues are from oil and gas, according to the U.S. Energy Information Administration.
Medvedev’s first deputy, Igor Shuvalov, said the emergency budget will be based on current oil prices. The original 2015 federal budget was based on oil averaging $100 over the year. Oil (WTI) futures settled at $45.59 on Friday with Brent oil settling at $48.79.

“We are drawing up this plan considering the current oil price on the market,” Shuvalov said on the Russian TV show Vesti Saturday.

Last week, Medvedev said Russia’s anti-crisis measures are the country’s top priority. The new budget would require about 60 bills to be drafted, and a series of presidential decrees. He said part of the measures will include support for small businesses, as well as financial support for individual companies.

Russia’s economy is getting hit by weaker oil prices and sanctions imposed on it by Washington and Brussels. Investors were hoping that the European Union, at least, would end sanctions in July. But recent fighting in four Ukrainian provinces on the Russian border, and the cancellation of last week’s peace conference in Kazakhstan, has the E.U. mum on sanctions now.
Alexei Kudrin, Russia’s former Finance Minister, told attendees of the World Economic Forum in Davos last week that sanctions could go on for another two to three years.

Russia’s third quarter GDP rose just 0.4%, and is expected to turn negative in the fourth quarter. This year will be a tough slog for Russia, even if the government rewrites its budget. GDP is expected to decrease by 5% this year, Moody’s Investors Service said on Jan. 15.

Friday, January 23, 2015

Late Saudi King Abdullah buried in unmarked grave



RIYADH, Saudi Arabia (AP) -- Saudi Arabia's newly enthroned King Salman moved quickly Friday to name a future successor to the crown in his oil-rich kingdom, a significant appointment that puts the kingdom's future squarely in the hands of a new generation.


King Salman bin Abdul-Aziz Al Saud's actions came as the Sunni-ruled kingdom mourned King Abdullah, who died early Friday at the age of 90 after nearly two decades in power.

He was buried Friday afternoon in an unmarked grave, his body shrouded in a simple beige cloth without a coffin. The austere, subdued burial was in line with Islamic tradition that all people - even kings - are equal in death before God.

A royal decree affirmed Crown Prince Muqrin, 69, as Salman's immediate successor. After Muqrin, Salman named Interior Minister Prince Mohammed bin Nayef, 55, as deputy crown prince, making him second-in-line to the throne. Mohammed is the first grandson of Saudi Arabia's founder, King Abdul-Aziz Al Saud, to be named as a future heir.

King Salman promised in a nationally televised speech to continue the policies of his predecessors.
"We will continue adhering to the correct policies which Saudi Arabia has followed since its establishment," Salman said.

For more than six decades, power has passed among the sons of King Abdul-Aziz, from brother to brother, since his death in 1953. But ranks of that generation, largely in their 70s and 80s, are thinning.

The decision to name Mohammed as deputy crown prince helps alleviate uncertainty over which of Abdul-Aziz's hundreds of grandsons would ascend to the throne. It also highlighted the Al Saud family's ability to coalesce around thorny issues of succession to ultimately preserve the stability of their rule.

Salman on Friday also appointed his son, Prince Mohammed, as Defense Minister. The prince, in his 30s, was head of his father's royal court when Salman was crown prince and is among his most-favored sons.

In his first speech as king, Salman also made an oblique reference to the chaos gripping the greater Middle East as the extremist Islamic State group now holds a third of both Iraq and Syria.

"The Arab and the Islamic nations are in dire need of solidarity and cohesion," the king said.

Salman, 79, had increasingly taken on the duties of the king over the past year as his ailing predecessor and half brother, Abdullah, became more incapacitated. Abdullah officially ascended to the throne in 2005, but had been de-facto ruler for years before that.

State television aired images of the prayer ahead of his burial in Riyad's al-Oud cemetery in an area reserved for royals. Hundreds gathered outside the cemetery, which was guarded by security officials. One billboard in the capital with Abdullah's image said: "To God we belong and to God we shall return."

Leaders from around the world expressed their condolences for King Abdullah.

U.S. President Barack Obama described the late Saudi king as a candid leader who had the courage of his convictions, including "his steadfast and passionate belief in the importance of the U.S.-Saudi relationship as a force for stability and security in the Middle East and beyond."

The president of the neighboring United Arab Emirates, Sheikh Khalifa bin Zayed Al Nahyan, said in a statement that Abdullah "generously gave a lot to his people and his nation," while Egyptian President Abdel-Fattah el-Sissi said "the Saudi kingdom and the Arab nation have lost a leader of its best sons."

Salman served as defense minister since 2011. That made him the head of the military as Saudi Arabia joined the United States and other Arab countries in carrying out airstrikes in Syria in 2014 against the Islamic State group, the Sunni militant group that the kingdom began to see as a threat to its own stability.

Salman takes the helm at a time when the ultraconservative Muslim kingdom and oil powerhouse is trying to navigate social pressures from a burgeoning youth population - over half the population of 20 million is under 25 - seeking jobs and increasingly testing boundaries of speech on the Internet, where criticism of the royal family is rife.

The new king, in a departure from past monarchs, used his Twitter account to send a message to his 1.3 million followers.

"I ask God to ensure my success to serve our dear people and realize their hopes, and to preserve our nation and society's security and stability, and to protect it from all evil," the message read.

The country is also facing plunging global oil prices, which forms the backbone of its economy.

Salman's health has been a question of concern. He suffered at least one stroke that has left him with limited movement on his left arm.

Salman is among the so-called "Sudeiri Seven" - seven sons born to one of Abdul-Aziz's most favored wives, Hussa bint Ahmad Sudeiri. The seven brothers were seen as a center of power within the family. Abdullah's predecessor, King Fahd, was among the seven, as were Abdullah's first two crown princes, Sultan and Nayef, who died in 2011 and 2012 respectively before reaching the throne.
Prince Mohammed is the son of Salman's brother Nayef. Like his father, Nayef, who was a formidable power in Saudi Arabia until his death in 2012, Mohammed is head of the powerful Interior Ministry that oversees the country's police. Mohammed was the target of a botched assassination attempt by al-Qaida militants in 2009.
---
Batrawy reported from Dubai, United Arab Emirates. Associated Press writers Maamoun Youssef and Jon Gambrell in Cairo, and Adam Schreck in Dubai, United Arab Emirates, contributed to this report.

New Saudi King Salman Names Heirs And Promises Stability

      Saudi king names Salman as crown prince                                                                    



By ABDULLAH AL-SHIHRI and AYA BATRAWY    
                                                                      

RIYADH, Saudi Arabia (AP) — Saudi Arabia's newly enthroned King Salman moved quickly Friday to name a future successor to the crown in his oil-rich kingdom, a significant appointment that puts the kingdom's future squarely in the hands of a new generation.


King Salman bin Abdul-Aziz Al Saud's actions came as the Sunni-ruled kingdom mourned King Abdullah, who died early Friday at the age of 90 after nearly two decades in power.


He was buried Friday afternoon in an unmarked grave, his body shrouded in a simple beige cloth without a coffin. The austere, subdued burial was in line with Islamic tradition that all people — even kings — are equal in death before God.
A royal decree affirmed Crown Prince Muqrin, 69, as Salman's immediate successor. After Muqrin, Salman named Interior Minister Prince Mohammed bin Nayef, 55, as deputy crown prince, making him second-in-line to the throne. Mohammed is the first grandson of Saudi Arabia's founder, King Abdul-Aziz Al Saud, to be named as a future heir.


King Salman promised in a nationally televised speech to continue the policies of his predecessors.
"We will continue adhering to the correct policies which Saudi Arabia has followed since its establishment," Salman said.


For more than six decades, power has passed among the sons of King Abdul-Aziz, from brother to brother, since his death in 1953. But ranks of that generation, largely in their 70s and 80s, are thinning.


The decision to name Mohammed as deputy crown prince helps alleviate uncertainty over which of Abdul-Aziz's hundreds of grandsons would ascend to the throne. It also highlighted the Al Saud family's ability to coalesce around thorny issues of succession to ultimately preserve the stability of their rule.


Salman on Friday also appointed his son, Prince Mohammed, as Defense Minister. The prince, in his 30s, was head of his father's royal court when Salman was crown prince and is among his most-favored sons.


In his first speech as king, Salman also made an oblique reference to the chaos gripping the greater Middle East as the extremist Islamic State group now holds a third of both Iraq and Syria.


"The Arab and the Islamic nations are in dire need of solidarity and cohesion," the king said.


Salman, 79, had increasingly taken on the duties of the king over the past year as his ailing predecessor and half brother, Abdullah, became more incapacitated. Abdullah officially ascended to the throne in 2005, but had been de-facto ruler for years before that.


State television aired images of the prayer ahead of his burial in Riyad's al-Oud cemetery in an area reserved for royals. Hundreds gathered outside the cemetery, which was guarded by security officials. One billboard in the capital with Abdullah's image said: "To God we belong and to God we shall return."


Leaders from around the world expressed their condolences for King Abdullah.


U.S. President Barack Obama described the late Saudi king as a candid leader who had the courage of his convictions, including "his steadfast and passionate belief in the importance of the U.S.-Saudi relationship as a force for stability and security in the Middle East and beyond."


The president of the neighboring United Arab Emirates, Sheikh Khalifa bin Zayed Al Nahyan, said in a statement that Abdullah "generously gave a lot to his people and his nation," while Egyptian President Abdel-Fattah el-Sissi said "the Saudi kingdom and the Arab nation have lost a leader of its best sons."


Salman served as defense minister since 2011. That made him the head of the military as Saudi Arabia joined the United States and other Arab countries in carrying out airstrikes in Syria in 2014 against the Islamic State group, the Sunni militant group that the kingdom began to see as a threat to its own stability.


Salman takes the helm at a time when the ultraconservative Muslim kingdom and oil powerhouse is trying to navigate social pressures from a burgeoning youth population — over half the population of 20 million is under 25 — seeking jobs and increasingly testing boundaries of speech on the Internet, where criticism of the royal family is rife.


The new king, in a departure from past monarchs, used his Twitter account to send a message to his 1.3 million followers.


"I ask God to ensure my success to serve our dear people and realize their hopes, and to preserve our nation and society's security and stability, and to protect it from all evil," the message read.


The country is also facing plunging global oil prices, which forms the backbone of its economy.


Salman's health has been a question of concern. He suffered at least one stroke that has left him with limited movement on his left arm.


Salman is among the so-called "Sudeiri Seven" — seven sons born to one of Abdul-Aziz's most favored wives, Hussa bint Ahmad Sudeiri. The seven brothers were seen as a center of power within the family. Abdullah's predecessor, King Fahd, was among the seven, as were Abdullah's first two crown princes, Sultan and Nayef, who died in 2011 and 2012 respectively before reaching the throne.
Prince Mohammed is the son of Salman's brother Nayef. Like his father, Nayef, who was a formidable power in Saudi Arabia until his death in 2012, Mohammed is head of the powerful Interior Ministry that oversees the country's police. Mohammed was the target of a botched assassination attempt by al-Qaida militants in 2009.
___


Batrawy reported from Dubai, United Arab Emirates. Associated Press writers Maamoun Youssef and Jon Gambrell in Cairo, and Adam Schreck in Dubai, United Arab Emirates, contributed to this report.

Thursday, January 22, 2015

Saudi King Abdullah dies, new ruler is Salman




RIYADH, Saudi Arabia (AP) -- Saudi Arabia's King Abdullah, the powerful U.S. ally who joined Washington's fight against al-Qaida and sought to modernize the ultraconservative Muslim kingdom with incremental but significant reforms, including nudging open greater opportunities for women, has died, according to Saudi state TV. He was 90.

More than his guarded and hidebound predecessors, Abdullah assertively threw his oil-rich nation's weight behind trying to shape the Middle East. His priority was to counter the influence of rival, mainly Shiite Iran wherever it tried to make advances. He and fellow Sunni Arab monarchs also staunchly opposed the Middle East's wave of pro-democracy uprisings, seeing them as a threat to stability and their own rule.

He backed Sunni Muslim factions against Tehran's allies in several countries, but in Lebanon for example, the policy failed to stop Iranian-backed Hezbollah from gaining the upper hand. And Tehran and Riyadh's colliding ambitions stoked proxy conflicts around the region that enflamed Sunni-Shiite hatreds - most horrifically in Syria's civil war, where the two countries backed opposing sides. Those conflicts in turn hiked Sunni militancy that returned to threaten Saudi Arabia.

And while the king maintained the historically close alliance with Washington, there were frictions as he sought to put those relations on Saudi Arabia's terms. He was constantly frustrated by Washington's failure to broker a settlement to the Israel-Palestinian conflict. He also pushed the Obama administration to take a tougher stand against Iran and to more strongly back the mainly Sunni rebels fighting to overthrow Syrian President Bashar Assad.

Abdullah's death was announced on Saudi state TV by a presenter who said the king died at 1 a.m. on Friday. His successor was announced as 79-year-old half-brother, Prince Salman, according to a Royal Court statement carried on the Saudi Press Agency. Salman was Abdullah's crown prince and had recently taken on some of the ailing king's responsibilities.

Abdullah was born in Riyadh in 1924, one of the dozens of sons of Saudi Arabia's founder, King Abdul-Aziz Al Saud. Like all Abdul-Aziz's sons, Abdullah had only rudimentary education. Tall and heavyset, he felt more at home in the Nejd, the kingdom's desert heartland, riding stallions and hunting with falcons. His strict upbringing was exemplified by three days he spent in prison as a young man as punishment by his father for failing to give his seat to a visitor, a violation of Bedouin hospitality.

Abdullah was selected as crown prince in 1982 on the day his half-brother Fahd ascended to the throne. The decision was challenged by a full brother of Fahd, Prince Sultan, who wanted the title for himself. But the family eventually closed ranks behind Abdullah to prevent splits.

Abdullah became de facto ruler in 1995 when a stroke incapacitated Fahd. Abdullah was believed to have long rankled at the closeness of the alliance with the United States, and as regent he pressed Washington to withdraw the troops it had deployed in the kingdom since the 1990 Iraqi invasion of Kuwait. The U.S. finally did so in 2003.

When President George W. Bush came to office, Abdullah again showed his readiness to push against his U.S. allies.

In 2000, Abdullah convinced the Arab League to approve an unprecedented offer that all Arab states would agree to peace with Israel if it withdrew from lands it captured in 1967. The next year, he sent his ambassador in Washington to tell the Bush administration that it was too unquestioningly biased in favor of Israel and that the kingdom would from now on pursue its own interests apart from Washington's. Alarmed by the prospect of a rift, Bush soon after advocated for the first time the creation of a Palestinian state alongside Israel.

The next month, the Sept. 11, 2001 terror attacks took place in the United States, and Abdullah had to steer the alliance through the resulting criticism. The kingdom was home to 15 of the 19 hijackers, and many pointed out that the baseline ideology for al-Qaida and other groups stemmed from Saudi Arabia's Wahhabi interpretation of Islam.

When al-Qaida militants in 2003 began a wave of violence in the kingdom aimed at toppling the monarchy, Abdullah cracked down hard. For the next three years, security forces battled militants, finally forcing them to flee to neighboring Yemen. There, they created a new al-Qaida branch, and Saudi Arabia has played a behind-the-scenes role in fighting it.

The tougher line helped affirm Abdullah's commitment to fighting al-Qaida. He paid two visits to Bush - in 2002 and 2005 - at his ranch in Crawford, Texas.

When Fahd died in 2005, Abdullah officially rose to the throne. He then began to more openly push his agenda.

His aim at home was to modernize the kingdom to face the future. One of the world's largest oil exporters, Saudi Arabia is fabulously wealthy, but there are deep disparities in wealth and a burgeoning youth population in need of jobs, housing and education. More than half the current population of 20 million is under the age of 25. For Abdullah, that meant building a more skilled workforce and opening up greater room for women to participate. He was a strong supporter of education, building universities at home and increasing scholarships abroad for Saudi students.

Abdullah for the first time gave women seats on the Shura Council, an unelected body that advises the king and government. He promised women would be able to vote and run in 2015 elections for municipal councils, the only elections held in the country. He appointed the first female deputy minister in a 2009. Two Saudi female athletes competed in the Olympics for the first time in 2012, and a small handful of women were granted licenses to work as lawyers during his rule.

One of his most ambitious projects was a Western-style university that bears his name, the King Abdullah University of Science and Technology, which opened in 2009. Men and women share classrooms and study together inside the campus, a major departure in a country where even small talk between the sexes in public can bring a warning from the morality police.

The changes seemed small from the outside but had a powerful resonance. Small splashes of variety opened in the kingdom - color and flash crept into the all-black abayas women must wear in public; state-run TV started playing music, forbidden for decades; book fairs opened their doors to women writers and some banned books.

But he treaded carefully in the face of the ultraconservative Wahhabi clerics who hold near total sway over society and, in return, give the Al Saud family's rule religious legitimacy.

Senior cleric Sheik Saleh al-Lihedan warned against changes that could snap the "thread between a leader and his people." In some cases, Abdullah pushed back: He fired one prominent government cleric who criticized the mixed-gender university. But the king balked at going too far too fast. For example, beyond allowing debate in newspapers, Abdullah did nothing to respond to demands to allow women to drive.

"He has presided over a country that has inched forward, either on its own or with his leadership," said Karen Elliot House, author of "On Saudi Arabia: Its People, Past, Religion, Fault Lines."

"I don't think he's had as much impact as one would hope on trying to create a more moderate version of Islam," she said. "To me, it has not taken inside the country as much as one would hope."

And any change was strictly on the royal family's terms. After the 2011 Arab Spring uprisings in particular, Saudi Arabia clamped down on any dissent. Riot police crushed street demonstrations by Saudi Arabia's Shiite minority. Dozens of activists were detained, many of them tried under a sweeping counterterrorism law by an anti-terrorism court Abdullah created. Authorities more closely monitored social media, where anger over corruption and unemployment - and jokes about the aging monarchy - are rife.

Regionally, perhaps Abdullah's biggest priority was to confront Iran, the Shiite powerhouse across the Gulf.

Worried about Tehran's nuclear program, Abdullah told the United States in 2008 to consider military action to "cut off the head of the snake" and prevent Iran from producing a nuclear weapon, according to a leaked U.S. diplomatic memo.

In Lebanon, Abdullah backed Sunni allies against the Iranian-backed Shiite guerrilla group Hezbollah in a proxy conflict that flared repeatedly into potentially destabilizing violence. Saudi Arabia was also deeply opposed to longtime Iraqi Prime Minister Nouri al-Maliki, whom it considered a tool of Iran oppressing Iraq's Sunni Muslim minority.

In Syria, Abdullah stepped indirectly indirectly into the civil war that emerged after 2011. He supported and armed rebels battling to overthrow President Bashar Assad, Iran's top Arab ally, and pressed the Obama administration to do the same. Iran's allies Hezbollah and Iraqi Shiite militias rushed to back Assad, and the resulting conflict has left hundreds of thousands dead and driven millions of Syrians from their homes.

From the multiple conflicts, Sunni-Shiite hatreds around the region took on a life of their own, fueling Sunni militancy. Syria's war helped give birth to the Islamic State group, which burst out to take over large parts of Syria and Iraq. Fears of the growing militancy prompted Abdullah to commit Saudi airpower to a U.S.-led coalition fighting the extremists.

Toby Matthiesen, author of "Sectarian Gulf: Bahrain, Saudi Arabia, and the Arab Spring That Wasn't," said Abdullah was not "particularly sectarian in a way that he hated Shiites for religious reasons. ... There are other senior members of the ruling family much more sectarian." But, he said, "Saudi Arabia plays a huge role in fueling sectarian conflict."

Abdullah had more than 30 children from around a dozen wives.

Floating storage back in favour



With the oil market firmly back in contango, the demand for tankers to be used for storage has soared.

 With oil prices down more than 50% in the last six months, the likes of Vitol, Trafigura and Koch Supply & Trading are all looking at moving back into this profitable sector.

The last time this happened at this scale was back in 2009, when the slowdown in global demand during the financial crisis created a massive contango in the crude markets.

Just a month ago market conditions were not as favourable for storage at sea.

But since the New Year the contango has widened and rates for a 12-month ship charter have almost doubled.

Even though shipowners are in no rush to take on less lucrative floating storage business, market observers say, for traders a contango 'carry' of just $8 (€7) a barrel for the next year for tankers containing 2 million barrels of oil will mean the contents of the vessel will generate $16 million over this period.

However, compared with 2009, fewer players are able to take advantage of the contango structure. The absence of cheap financing has been a deterrent, while US regulators have raised the level of scrutiny into banks' physical commodities businesses.

This means about 20 million barrels are in floating storage now, compared with the 100 million stored at sea last time around.

This level of floating storage is also having an impact on the demand for onshore storage.

Some analysts are saying that up to 1 million barrels a day surplus can be maintained for a year before any significant additional storage infrastructure investments are required.

The IEA, however, predicts that global oil inventories may reach storage capacity limits in the next six months, particularly in Europe.

Additionally the contango may well spill over into refined products, such as petrol, diesel and naptha, creating an even bigger demand for storage. - See more at:

http://www.tankstoragemag.com/industry_news.php?item_id=8754#sthash.URyE5gux.dpuf

Wednesday, January 21, 2015

Eni warns oil may shoot up to $200 without Opec cuts

Oil pipeline and nodding donkey
Oil could hit $200 a barrel in four or five years, says Eni


Italian oil group Eni has warned oil could shoot up to $200 a barrel if the Opec cartel fails to cut supplies.

Eni's chief executive, Claudio Descalzi, said the oil industry would cut capital spending by 10-13% this year because of slumping prices.

He said that would create longer-term shortages and sharp price rises in four to five years' time.

Mr Descalzi was speaking at the World Economic Forum in the Swiss resort of Davos.

He said: "Opec is like the central bank for oil which must give stability to the oil prices to be able to invest in a regular way."

Politicians, economists and industry leaders in Davos have been voicing their worries over the impact of lower prices.

End Quote Zhou Xiaochuan People's Bank of China governor

Total and BHP Billiton both said on Wednesday that they would cut back on shale oil projects.

People's Bank of China governor Zhou Xiaochuan said low oil prices could slow down China's development of renewable energy projects.

He said: "We worry a little bit that the price signal may give disincentive for new energy types to develop and could reduce investment in new non-fossil energy,"

But he added that lower prices would be good for the economy and job creation, because China was dependent on imported oil and gas.

Opec's decision

Opec secretary general Abdullah al-Badri, also speaking at Davos, defended the group's decision not to cut output.

He said: "Everyone tells us to cut. But I want to ask you, do we produce at higher cost or lower costs?

"Let's produce the lower cost oil first and then produce the higher cost,"

"We will go back to normal very soon," he said.

Oil prices have sunk by almost 60% since June to below $50 a barrel because of a large supply glut.

The price slide accelerated after Opec decided in November not to cut production.
http://www.bbc.com/news/business-30913321#

States with the highest (and lowest) gas taxes

california gas station



As gas prices continue to fall, some Americans believe that the federal government should raise its gas tax, which has been unchanged at 18.3 cents per gallon since 1993. Yet, despite a clear need to bolster transportation and infrastructure funding, which often comes from taxes on gasoline, Congress appears to have little interest in raising the fuel tax.

With the federal government apparently disinterested in raising fuel taxes, some states have taken the lead in funding transportation. According to Michael Green, a spokesman for AAA, "Many states have taken it upon themselves to address the challenges associated with paying for roads, and other transportation projects."

24/7 Wall St. reviewed effective gas tax rates in each state, as summarized by the American Petroleum Institute. We then compared the state's tax rate against the average gas price in the state. The share of fuel prices that are paid in taxes and fees has risen as gasoline has gotten cheaper. In a few states, taxes make up 15% or more of the price per gallon, including accounting for more than 21% of the gas price in Pennsylvania. Still, taxes in eight states account for less than 10% of the retail price of gas.

Not every state with a low gas tax, relative to the national average price, has a major incentive to increase the amount consumers pay. For instance, Alaska derives much of its tax revenue from oil production, and has historically had less use for a gas tax. However, in some states, the argument for a higher gas tax is likely more compelling. For New Jersey, which has the second lowest fuel tax and is constrained by substantial debts and pension liabilities, a gas tax hike could help it improve its infrastructure.

In some instances, states may not have the ability to raise more revenues from gas taxes, however. New Yorkers already pay more than 45 cents per gallon in fuel taxes, and generally face one of the nation's highest tax burdens. Thus, even at current low prices, it may be politically difficult for the state to raise fuel taxes.

One major complicating factor is that some states peg their fuel tax to the price of gas. As gas prices drop, the amount these states can collect will also fall, especially if the drop in prices substantially outweighs the extra amount Americans are willing to drive.

Another complicating factor in deciding how to tax gas is that the market for gasoline differs substantially across the U.S. States in the Southeast, for example, are home to some of the nation's least expensive gas, Green explained, "because these are states that are near major refineries, and also those refineries have access to domestic crude oil." California, on the other hand, typically has higher gas prices because its refineries consistently run at or near capacity to meet demand for the state's specific, legally-required blend of gasoline.

In order to identify the effective gas tax in each state, 24/7 Wall St. reviewed January 2015 data from the American Petroleum Institute. We also reviewed data on gas prices from AAA's Daily Fuel Gauge Report for January 14, 2015. Figures on state infrastructure are from either the Federal Highway Administration, or the American Society of Civil Engineers' Infrastructure Report Card. Figures on per capita taxes are from the Tax Foundation, while information on states' oil production, consumption and infrastructure comes from the Energy Information Administration (EIA).
These are the states with the lowest gas taxes:

1. Alaska
> Tax as pct. of gas price: 3.9%
> State fuel tax: 11.3 cents per gallon (the lowest)
> Gas price: $2.91 (2nd highest)

Alaskans pay just 11.3 cents per gallon in gas taxes, the lowest of any state, despite having the second highest gas price in the nation. The state's economy has historically been dependent on the energy industry, which also accounts for much of its economic activity and tax revenues. However, this also exposes the state to fluctuations in the oil price, including the commodity's current rout.

2. New Jersey
> Tax as pct. of gas price: 7.0%
> State fuel tax: 14.5 cents per gallon (2nd lowest)
> Gas price: $2.06 (22nd highest)

New Jersey has the second lowest gas tax in the nation. The price of fuel, however, is relatively high due in large part to a statewide ban on self-service gas stations. Only Oregon has a similar law. While reform advocates argue that lifting the ban would lower gas prices, proponents of the ban argue that full-service stations are a critical source of jobs.

3. South Carolina
> Tax as pct. of gas price: 8.6%
> State fuel tax: 16.8 cents per gallon (3rd lowest)
> Gas price: $1.94 (12th lowest)

Gasoline costs $1.94 per gallon in South Carolina, one of only a few states where gas is below $2 a gallon. As in most states, low gas prices are the result of low taxes. South Carolina has the third-lowest gas tax in the nation. Overall state taxes are quite low as well, in fiscal 2012, the state collected $1,710 per capita in taxes, less than all but two other states.

4. Oklahoma
> Tax as pct. of gas price: 9.4%
> State fuel tax: 17.0 cents per gallon (4th lowest)
> Gas price: $1.81 (2nd lowest)

Oklahoma levies 17 cents on each gallon of gasoline, the fourth lowest fuel tax nationwide. While the lower gas price is a boon for Oklahoma drivers, the state may have more trouble than others funding infrastructure projects. The state received a close-to-failing grade for its bridges and roads in 2013 from the ASCE, which noted that over 70% of funds from fuel taxes, registration fees and other vehicle-related sources "are diverted to non-transportation purposes."

5. Arizona
> Tax as pct. of gas price: 9.5% (5th lowest)
> State fuel tax: 19.0 cents per gallon (8th lowest)
> Gas price: $2.01 (21st lowest)

Arizona maintains relatively low gasoline taxes, charging just 19 cents per gallon, among the lowest gas taxes of any state. As a result, less than 10% of the price of gas goes to the state, well below the average nationwide. The lack of competing uses for oil may also help keep gas prices down. According to the EIA, seven of every eight barrels of petroleum used in the state are used for transportation, mostly in the form of gasoline and diesel fuel.


These are the states with the highest gas taxes:

1. Pennsylvania
> Tax as pct. of gas price: 21.3% (the highest)
> State fuel tax: 50.5 cents per gallon (the highest)
> Gas price: $2.38 (7th highest)
Pennsylvania has the nation's highest fuel taxes, at 50.5 cents per gallon. This is due to the state's relatively new gas tax, passed in 2013. The new tax is charged on fuel transactions and is based on the wholesale price of gas — although the reference price used is locked in for roughly another two years and then becomes subject to an even higher minimum. The tax is designed to raise money for construction and necessary repairs for bridges and roads throughout the state.

2. Connecticut
> Tax as pct. of gas price: 17.7% (3rd highest)
> State fuel tax: 43.2 cents per gallon (5th highest)
> Gas price: $2.44 (6th highest)

Connecticut charges 47.4 cents in total taxes and fees for every gallon of gas, more than all but two other states. Yet, the state's gas taxes have been on the decline, as a portion of the taxes is based on gasoline prices. Currently, a gallon of gas costs $2.44 in Connecticut, among the highest gas prices in the United States, although far below the year ago price of $3.69 per gallon.

3. California
> Tax as pct. of gas price: 17.7% (4th highest)
> State fuel tax: 45.4 cents per gallon (4th highest)
> Gas price: $2.57 (4th highest)

California's gas taxes are among the highest in the nation, with the state charging 45.4 cents for every gallon purchased. However, such high fees may well be justified as more than 29 billion vehicle miles were driven on California roads last October alone, the most of any state. Additionally, more than 36% of the state's bridge surface area was either structurally deficient or functionally obsolete as of 2013, more than in all but a few states. In all, California taxed nearly 10 billion gallons of gas in the first eight months of 2014, well more than any other state.

4. New York
> Tax as pct. of gas price: 17.4% (2nd highest)
> State fuel tax: 45.1 cents per gallon (3rd highest)
> Gas price: $2.59 (3rd highest)

New York charges more than 45 cents per gallon in taxes, among the highest tax rates in the country. Yet, although the state's taxes are extremely high, they are likely needed. As of 2013, more than 60% of bridge area in the state was deficient, the highest rate in the United States. Critics of the state's tax policy, however, could point to New York's extremely high state and local tax burden, which was the highest in the country as of fiscal 2011, at 12.6% of per capita income.

5. North Carolina
> Tax as pct. of gas price: 17.2% (5th highest)
> State fuel tax: 37.8 cents per gallon (6th highest)
> Gas price: $2.19 (19th highest)

North Carolina charges nearly 38 cents in taxes and fees per gallon of gasoline. The state also moved relatively quickly to hike the fixed portion of its gas tax by 1 cent by at the start of 2015. Yet, with gas prices expected to stay low, and part of the state's tax pegged to wholesale prices on a lag, the state's fuel tax could fall significantly in the coming months.