Nation's cheapest gas found in N.J.         

[May 25, 2007]  TRENTON, N.J. (AP) --  Motorists heading out on vacation this Memorial Day weekend will find it pays to fill 'er up in New Jersey, home of the cheapest gas in the nation, according to AAA.

At an average $2.95 for a gallon of regular, New Jersey was the only state Thursday where the average price was below $3, the automobile association said.

Prices at New Jersey pumps Thursday were about 50 cents less per gallon than states with the highest prices -- Illinois, Michigan, Indiana and California.

One of the big reasons for the cheaper gas: lower gas taxes.

"The tax rate is among the lowest in the country, versus New York, which has one of the highest rates," said Ron Planting, an economist with the Washington, D.C.-based American Petroleum Institute.

According to a March API report, New Jerseyans paid 32.9 cents per gallon in state and federal taxes, the third-lowest rate in the country.

Having refineries in-state that are producing the gas helps, too, said AAA Mid-Atlantic spokesman David Weinstein, because it cuts down on the cost of getting the gas to the consumer.

Along the New Jersey Turnpike and Garden State Parkway, where prices are changed once per week, a gallon of regular was going for $2.91 but was set to go up to $2.98 on Friday, according to a New Jersey Turnpike Authority spokesman.

[Text copied from file received from AP Digital; article by Chris Newmarker, Associated Press writer]