Gas prices at 10-year high

By Sean Hao
Advertiser Staff Writer

The average gas price for regular self-serve in Hawai'i rose to $2.094 a gallon yesterday, the highest recorded in the past 10 years, according to the AAA travel club.

Honolulu also hit a new high, averaging over $2.002 a gallon, as did Wailuku, Maui, at $2.349 a gallon.

The statewide average reflected a sharp increase — up 2.2 cents from Thursday.

Gasoline prices in Hawai'i and nationwide have continued to climb this week amid concerns about low supplies and an end-of-summer increase in demand.

California also is feeling the pinch. The statewide average there rose 3.2 cents to $2.054 a gallon yesterday.

Drivers in several California markets including Los Angeles, Oakland, San Diego and San Francisco were paying more at the pump yesterday than those in Honolulu, according to AAA.

But Hawai'i remains the most expensive state in the auto association's survey.

Prices have risen with increased demand at the end of the busy summer driving season. At the same time, the blackout in the Northeast last week led to the shutdown of seven North American refineries.

Other unexpected refinery shutdowns on the West Coast and a rupture in a pipeline in Arizona also contributed to reduced supply. Crude oil refined in Hawai'i typically is purchased two to three months in advance, so it's unlikely the recent rise is a result of actual cost increases, said Widhyawan "Wawan" Prawiraatmadja, an energy researcher at the East-West Center.

"That's part of the inconsistency" of gas prices, he said. In general. gasoline prices rise when there's an event causing supply or oil price concerns. "But when that's over and oil prices come down, it's a long time before gas prices come down," he said.

"That's a sign that there's a lack of competition."

The spike in West Coast gas prices undermines arguments in favor of gasoline price caps for Hawai'i, which were passed by the Legislature last year and are scheduled to take effect next summer.

Because the law bases the cap on West Coast fuel prices, regular gasoline prices would be limited to a maximum of about $2.43 a gallon next week, if the price caps were in place now.

Drivers shouldn't expect relief from higher prices anytime soon, experts said. AAA said it expects 33.4 million Americans to hit the road during Labor Day weekend, up 1.8 percent from last year, and that will keep gasoline demand high.

"I don't see any major retreats in energy prices over the next few months," said Stephen Brown, head of energy economics at the Dallas Federal Reserve.

USA Today contributed to this report. Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.

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