Q: Why are Minnesota's gas prices always lower than Wisconsin's?

A: The reasons include how much Wisconsin taxes gasoline and where gas stations in both states buy the fuel in the first place.

Wisconsin's gas taxes and environmental fees amount to 32.9 cents per gallon, nearly 8 cents higher than the 25.5 cents per gallon that Minnesota levies, said Matthew Hauser, president of the Wisconsin Petroleum Marketers and Convenience Store Association.

Wisconsin also brings in its wholesale gasoline in mostly from refineries in the Chicago area, whereas Minnesota has its own refineries in the Twin Cities, Hauser said. As a result, wholesale gas prices in the Madison area are about 4 to 7 cents per gallon higher than those in the Minneapolis area, he said.

Hauser said those two factors alone would be enough to account for the price difference between Wisconsin's average retail fuel price of $1.91 per gallon and Minnesota's average retail price of $1.83 per gallon, as priced this week by AAA.

"There is little difference in Minnesota versus Wisconsin prices once adjusted for taxes and wholesale price differences," Hauser said.

Other more controversial reasons sometimes cited as contributing to the price difference between the two states include Minnesota requirements to blend in minimum amounts of ethanol into gasoline sold there. Wisconsin's minimum mark-up law, which requires gas stations to mark up the price at the pump allow for a minimum profit, is also cited by some observers, though small gas station owners who are meant to benefit from that law say that exceptions to the rule prevent it from having much effect on prices.

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