Why Chicago pays so much for gas

The Lundberg Survey says Chicago is No. 1.

AAA says the city doesn't occupy the top spot but ranks way up there.

Either way, it's a distinction Chicago drivers could live without: paying more for gasoline than nearly anyone else in the nation.

Analysts agree that global demand, particularly in China and India, is driving prices nationally, as are refinery capacity limits and speculation on the crude oil futures market.

What makes Chicago prices even higher than the U.S. norm as fuel prices continue to soar?

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Taxes, for one thing.

On that point, AAA Chicago, which represents motorists, and the Illinois Petroleum Council, which represents the oil industry, agree.

Illinois is one of only nine states to apply its basic sales tax to gasoline purchases. Most -- including neighboring Iowa, Wisconsin, Missouri and Kentucky -- do not.

Beyond that, Illinois, alone among Midwestern states, allows local units of government to add taxes to gasoline sales. Cook County, for instance, tacks on 6 cents per gallon, Chicago 5 cents. It all adds up.

Beth Mosher, spokeswoman for AAA Chicago, and David Sykuta, executive director of the state petroleum council, also concur that environmental requirements add to Chicago's cost.

"The whole eight-county metro area is on the high side of the equation," Sykuta said. "In the summer, the area has to sell reformulated gas to help fight ozone emissions. It's clean, but it's also significantly more expensive to make."

Only southern California, where Los Angeles often competes with Chicago for the nation's highest pump price, has stricter reformulation rules, Sykuta said.

"A fourth factor is the cost of operating the retail facility itself (in Chicago)," said Sykuta, citing such factors as Teamster delivery contracts and environmental tank insurance required in any urban area.

Lundberg and AAA come up with slightly different rankings because they use different methodology. Lundberg uses a composite of all three typically available octane levels. AAA reports the average price of a gallon of unleaded regular fuel.

Lundberg's latest figures have Chicago at $4.07 per gallon, putting it, with Long Island, alone for now in the $4 club. AAA on Monday had Chicago at $4.05, not far behind New York City at $4.06 and Santa Barbara, Calif., at $4.10.

U.S. Sen. Dick Durbin conducted a news conference at a Chicago gas station Monday, telling reporters the Federal Trade Commission has agreed to his request to investigate fuel prices.

"As summer approaches, drivers and air travelers across America are feeling the heat from record high fuel prices, and projections suggest it's only going to get worse," Durbin said. "Yet these record-breaking prices are coming at time when the oil industry is reporting record-breaking profits. I'm pleased that the FTC is taking the issue seriously and has opened an investigation; we must ensure that American consumers are not falling victim to price-gougers and profiteers."

Sykuta says the industry welcomes the investigation and noted that previous probes have rarely found anything amiss. He also said Durbin and others who oppose drilling for more domestic oil contribute to the high prices.

"You can't have it both ways," Sykuta said. "You can't oppose all infrastructure expansions and then lead the opposition to oil companies when prices are up."