Are you paying too much for gas in Colorado? If you've been traveling this summer, you've noticed gas prices fall as soon as you cross the state line. There are a couple of issues in this one: we pay more, and our "regular gas" is only 85 octane. Oil companies tell us it is transportation cost and taxes that drive up the price. But, is that true?

GAS PRICES

VIDEO: Watch Our Investigation

7NEWS: The first thing you notice when you leave Colorado is that gas prices seem to be lower in neighboring states. Why? John Bennitt, Conoco: Their manufacturing costs are less. Their transportation costs might be less. But there are more factors. One is supply and demand. A low price is used by dealers to attract customers. That may be in part true. But according to the latest numbers available from the Department Of Energy, Colorado has the sixth-most expensive gas in the continental United States -- and these prices include transportation costs and exclude any taxes. And when you look at the Rocky Mountain region and neighboring states, Colorado is most expensive of all -- and it is higher than the national average. So, is the profit margin higher in Colorado? 7NEWS: What's the margin here at the Conoco station? Bennitt: We don't discuss margins. It is probably less than you think. 7NEWS: But you won't say how much the margin is? Bennitt: No. And with good reason. Our investigation has found that profit margins in Colorado are higher than the others states we surveyed. And while Bennitt wouldn't admit it on camera, he doesn't dispute our findings. When we presented our findings to Texaco, officials simply wouldn't talk with us about margins. But not only are prices higher in Colorado -- our regular gas has a lower octane. In Colorado and a couple of other mountain states, you are used to seeing 85 octane regular gas. Mid-grade is 87, and premium is 91. But when you cross the border to Kansas or some other neighboring states, the prices are lower and regular grade is 87-octane. Why? Bennitt says with less air pressure, Colorado cars run well with lower octane. Bennitt: Throughout Colorado, Utah, Wyoming, Montana -- because of high altitude -- the octane has been 85. It works! Bennitt: At this altitude, if your car doesn't ping, if you don't get pre-ignition under normal conditions, why not? Steve Larsen has been working on Jeeps for 20 years. He doesn't recommend 85 octane because most every owners manual on late model cars recommends 87 octane. 7NEWS: Is there a fuel-injected engine that you work on that recommends 85? Steve Larson, Mechanic, John Elway Jeep: I don't believe there is. Larsen: You can start getting pre-ignition, or ping, as the public knows it. It causes cylinders actually firing before it is supposed to, causing a knocking sound to come from the engine. Uh, it can cause engine damage. But mechanics at other dealerships say 85-octane is no problem. Bennitt: It depends on the quality of the engines. It depends on their own skills. I would listen to my mechanic. I listen to mine. But whether your car runs well on 85-octane or not, you are paying more in Colorado not only for lower octane gas, but for other grades as well. And while transportation and taxes do make some difference, stations here are charging more simply because you will pay it. And according to the Department Of Energy statistics, while gas prices are down in the past month, if you cross the border to other states, you will still find most have gas at a lower price.