Oil-Rich Alaska Pays Most for Gas

State's isolation, small population factor in prices averaging $4.65 per gallon
By Kevin Spak,  Newser Staff
Posted Jul 18, 2008 12:18 PM CDT
A drilling rig sit on Oooguruk Island off of the coast of Alaska's North Slope, Wednesday, Sept. 26, 2007. Despite producing lots of oil, Alaska pays the highest average gas prices in the nation.   (AP Photo/Steve Quinn)
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(Newser) – Think you’re paying a lot for gas? Try telling that to the people in Lime Village, Alaska, an isolated outpost where prices have hit $8.55 a gallon. Alaska is a major crude supplier, but its residents, paradoxically, face the highest average gas prices in the nation, Reuters reports, because the economies of scale don’t work in the sparsely populated state.

High prices have, however, been a windfall to the state’s government, which makes most of its money taxing oil exports. Some have proposed a one-time, $1,200 relief check—a popular fix, but ultimately a short-term one. Long-term? “Going back to dog teams is an option,” says one resident. “It's kind of a joke, but not a joke.”