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Figuring out why gas prices are what they are at a certain time and place seems less a science than a mystical art.

The price of oil is an obvious factor, though even the experts are hard put to explain how all the factors work together to influence gas prices, which as everybody knows vary hugely depending where you are. At the same time, it is possible to get a fairly a reasonable idea of where one is most likely to save a few pennies on a gallon of gas and vice versa.

One thing’s for sure: The price of gas is all over the place lately. Per-gallon prices nationwide inched up again after five weeks of relative stability, thanks to traders’ fears that Hurricane Dean would disrupt supplies.

Prices dropped immediately after Dean made landfall in Mexico, though “traders’ fears” will always be among the numerous factors—and they are numerous—dictating the price we pay at the pump.

Search engine

Web sites devoted to helping consumers find the best deal on automotive fuel are increasingly popular. One of the best is GasBuddy.com, which recently rolled out a zoomable gas price “temperature” map that uses color to illustrate averages from coast to coast.

For example, parts of Northern California, Michigan’s Upper Peninsula and other high-price regions glow deep red. The cheapest places—swaths of South Carolina and New Jersey, for instance—are shaded a deep green. Louisiana and Baton Rouge tend toward lighter green, which means cheap though not cheapest.

The market’s jittery response to Dean pushed much of Louisiana from mostly light green ($2.64 to $2.71 per gallon on average) to largely yellow ($2.71 to $2.78) literally overnight. The parts of the state that stayed green, and thus cheaper, were mainly around urban centers.

As a rule, gas prices in urban areas are lower than in less populated areas because of the level of competition. More people usually means more gas stations, more fuel sold and thus lower prices compared to less populated areas, fewer stations and less volume.

But Dustin Coupal, cofounder of Minneapolis-based GasBuddy.com, notes that there are exceptions to the rule. Take Chicago. On the temperature map, the Windy City is fire engine red and gas prices are outrageous—by U.S. standards, anyway. The rest of Illinois is cheaper, though not by much.

“Chicago is a little bit of a special case,” he says. “It’s a very large population with very few oil refineries, so they have to import a lot. It’s just a factor of importing gasoline.”

Red-state residents—pretty much all the northern states and a big chunk of the Midwest and the West—are burdened with higher gas prices than those in the Southeast. Dixie’s proximity to the Gulf of Mexico and its vast source of crude, multiple refineries, wholesalers and distributors and cheap transportation costs means residents pay less. Up north, not counting the Northeast, refineries are scarce, fuel has to be trucked long distances and any glitch in the transportation system causes prices to skyrocket. Same with remote regions of the West.

Death and ...

Taxes, naturally, are a major factor behind what gas costs in different states. The federal tax on gasoline and diesel is 18.4 cents a gallon. State taxes vary widely, though aren’t always an indicator of what’s the cheapest or most expensive.

While Louisiana and Texas both tax motor fuel at 20 cents a gallon, Texas as a general rule trends slightly more on average than Louisiana. New York taxes the most, at 33.5 cents a gallon, and Alaska the least, at 8 cents. Gas in both places is among the most expensive in the nation.

As for Louisiana, a recent look at GasBuddy put the cheapest gallon of regular gas to be found at a Spirit station in Monroe for $2.45 per gallon. The most expensive: $2.89 at a Sorrento Chevron station.

Mark Kaiser, research and development director of LSU’s Center for Energy Studies, notes two other factors affect wholesale and retail gas prices: the stuff entering and leaving the refinery. Heavy crude from Venezuela is more expensive to refine, for instance, than light crude from Africa.

Also, boutique fuels—roughly 20 types of specially formulated gasoline required by law in various parts of the country—make refinery production more complex, less efficient and thus more expensive. California’s smorgasbord of RFGs is a big reason gas is so expensive there. But these are just two more pieces of the gas price puzzle.

“The point is because there are so many factors we can’t pinpoint which of the factors are most important,” Kaiser says.

According to a 2005 report from the General Accounting Office, the price of crude accounts for roughly half the price of fuel and refining about 17%. Taxes, distribution and marketing come in at 23% and 12%, respectively.

Fine, but that doesn’t explain the idiosyncrasies of the local market, where “brand” stations like Shell and Exxon play by different rules than generic no-brand stations such as Racetrack. The Exxons have to buy their fuel from Exxon, while the generics can shop around and sometimes have the best deal, though not always.

In the zone

“Zone pricing” is at the heart of the mystery behind why stations in neighboring communities or within the same community charge different—sometimes radically different—prices. With zone pricing, an oil company groups its brand stations into geographic or market zones that may consist of several stations, a few or sometimes just one.

The oil company charges different wholesale prices to retailers by zone, depending on how much the oil company thinks the retailer within each zone can raise gas prices without losing market share. Retailers, naturally, try to set their price to cover costs and make a profit.

“I just can’t tell you how much our margins swing from day to day and week to week,” says one local operator who didn’t want his name used. “You make it when it goes down and lose it when it goes up.”

Competing stations keep an eagle eye on each other’s price boards. Mike Wright, vice president of public relations for the American Automobile Association in St. Louis, says big-box stores like Wal-Mart and Sam’s Club that sell gas basically at cost drag down prices at nearby retailers. Woe to the retailer caught in that orbit.

“If he’s two blocks away from a big-box store and they’re selling gas 10 cents below his normal mark-up, a lot of the retailers are suffering. No question about that,” Wright says, adding, “If you figure out gasoline prices call me back, will you?”