06.10.2008 1:51 pm
Why our gas is (relatively) cheap
St. Louis Post-Dispatch
You may have heard that Missouri now has the cheapest gasoline in the nation, but do you know why? Slate’s Jacob Leibenluft explains our advantage as a combination of “taxes, pipelines and ethanol.”
Our state taxes, at 17.6 cents a gallon, aren’t the lowest, but geography helps a lot:
But because of its proximity to Texas, Oklahoma, and the Gulf Coast states, Missouri is crisscrossed by some of the nation’s larger pipelines. Oil barges also pass through the state on the Mississippi and Missouri rivers. Proximity to producers reduces transportation costs a little, but it also makes Missouri less susceptible to price spikes when individual refineries run into problems.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
I think you are wrong on a few points Jacob. All the gas sold in St Louis, Eastern Missouri, and Southern Illinois comes from the refinery in Wood River (the only exception being premium gas at Mobile, Shell, and BP stations which all comes from their own refineries.
If Wood River would go down there would be a huge price spike.
If proximity to suppliers resulted in lower prices then why wouldn’t Texas, Oklahoma, and the Gulf Coast states enjoy lower gas prices? The answer is that transportation costs in a gallon of gasoline is a very small ammount.
So you can see your answer is fully incorrect. The reason why Missouri prices are the lowest in the country is because gasoline state taxes are lower then most states, and because wholesale prices follow a hybrid pricing model. The oil companies use a combo of Gulf prices and Chicago prices (they use the lower of the two.) This lets Missouri avoid a price increase when one of the two spike.