Is gas cheaper in MN or SD?

As record-breaking gas prices continue to rise across the county, South Dakotans are are feeling pain at the pump, but it's not as bad as other parts of the country.

South Dakota ranks near the bottom in the country for average price of gasoline, according to AAA. As of Friday, the average cost of a gallon of gas in the state is $3.975, compared to $4.013 in Wyoming and $3.924 in Iowa. Across the nation, the average gallon of gas costs $4.331. South Dakota's prices put it at 41st in the nation as of Friday.

The highest prices so far? California, where a gallon of gasoline costs over $5 on average, according to AAA.

But why does South Dakota gas cost less than the rest of the country, especially the coasts? It’s a variety of factors, multiple experts told the Argus Leader, from ethanol production, access to pipelines and regular economic demands.

More:Gas prices continue to rise across South Dakota, according to recent AAA analysis

South Dakota corn fuels vehicles as ethanol fuel blends cheaper than gas

Because of ethanol fuel blends, like E-10, E-15 and E-85, being available for consumption, consumers have more choices at the pump, said Dave Ellens, who farms corn near Wentworth, and sits on the South Dakota Corn Growers Association.

“If you have a flex fuel vehicle, I mean, it’s really a no-brainer to pick up that blend pump,” he said.

Currently, ethanol prices are on average $2 cheaper than crude gasoline, Ellens said. This means that higher ethanol-based fuels such as E-85 can be up to $1.60 cheaper than non-ethanol gasoline, though E-85 can only be used in flex-fuel vehicles. 

About 12.6 billion gallons of ethanol fuel were consumed in 2020, according to the United States Energy Information Administration (EIA), which collects and analyzes energy information in the nation.

Corn that’s used for ethanol in South Dakota is also grown in the state. Ellens said that by purchasing ethanol blends at the pump, consumers are supporting the community.

“We can rely on our own energy as opposed to relying on Russian barrels of oil,” he said. 

More:$888,000 top home for Feb. 14 features movie theater, game room, wet bar & indoor hot tub

Senator John Thune called on the Biden administration Thursday to prioritize the year-round use of E-15 as a way to reduce the U.S.’s dependence on foreign oil.

Economic factors from taxes to supply and demand drive prices

While states like California have higher fuel taxes, South Dakota ranks near the middle of the pack.

The gasoline state tax in South Dakota is 30 cents, according to data from AAA. But South Dakota gas taxes are nothing compared to California, where the gas tax is 53 cents for a regular gallon and 68 cents for a gallon of diesel.

More:Why are gas prices higher in California than Kansas? Gas experts break down costs from state to state

State and federal taxes make up about 15% of total fuel costs for a gallon of gas in the nation, according to AAA. The rest of the breakdown is as follows:

• 15% distribution(transportation)/marketing
• 15% refining/production costs
• 55% price of crude oil.

William Roggenthen, a research scientist at South Dakota School of Mines and Technology in the geology engineering department, also believes that supply and demand as well as economic factors such as competition, is one of the main drivers of the price of gas.

“That’s primarily what drives prices right now,” he said.

Roggenthen added that he thinks competition provided by the ethanol industry also helps drive the price of gas down in the state.

“There’s ethanol out there and there’s some economic benefit for our gas prices to have an effect on that,” he said.

Expert: Proximity to distribution outlets drive down prices

Pipelines also play a factor into how much a gallon of gas costs.

“Particularly there in the eastern part of the state, we’ve got a good pipeline that comes up and delivers,” Roggenthen said, referencing the Dakota Access Pipeline, which runs through North Dakota, South Dakota, Iowa and Illinois.

More:Gas prices are high and up another 7 cents nationwide. Here is the average price in each state.

“The ability to move the product because there’s a price associated with moving the product and if it’s cheaper to move the product, then that’s going to be reflected probably at the pump,” he said.

When looking at the Midwest region, with multiple pipelines and refineries, when it comes to the annual price of regular gas in 2021, people paid about $2.88 per gallon, while people in the Gulf Coast, which has multiple petroleum refineries, paid about $2.69, according to a 2022 report from the EIA. People located in the Rocky Mountains paid $3.17 per gallon while the West Coast paid $3.7 per gallon.

How long will gas prices stay high?

Gas Buddy, a tech company that finds real-time fuel prices across the nation, forecasted on Monday that gas prices will peak in May.

More:Why are gas prices rising so quickly? And how high are they expected to get?

“The high prices are likely to stick around for not days or weeks, like they did in 2008, but months. Gas Buddy now expects the yearly national average to rise to its highest ever recorded,” the company wrote in a press release on Monday.

Current prices of a gallon of gas in South Dakota as of Friday, according to AAA

Sioux Falls

• Regular: $3.892
• Mid: $4.094
• Premium: $4.422
• Diesel: $4.709

Rapid City

• Regular: $4.201
• Mid: $4.278
• Premium: $4.745
• Diesel: $4.791

Where to find the cheapest gas in Sioux Falls

Follow Annie Todd on Twitter @AnnieTodd96. Reach out to her with tips, questions and other community news at  or give her a call at 605-215-3757.

How much is gasoline in South Dakota right now?

What is the cheapest state to buy gas in?

Is gas cheaper in Iowa or South Dakota?

What is the highest gas price in South Dakota?