The national average price for regular unleaded self-service gas reached $1.735 per gallon, according to the AAA auto club's daily fuel gauge report.

The average price in Honolulu reached a new high of $2.017, up 1.4 cents from Wednesday's average. In Wailuku, gasoline also hit a new high yesterday, reaching $2.374 a gallon i the highest since the AAA began conducting its survey 10 years ago.

Gasoline prices nationwide have risen in recent weeks largely because of supply problems and heavy summer driving demand.

High prices are leading some drivers to be more conscious of where they fill up.

"I can't drive any less, that's what I do" for a living, said Bryan Geoffrey of Kane'ohe, who services credit card machines. However, high prices "make a difference as to where I buy gas."

Geoffrey blamed the gasoline prices on oil companies taking advantage of consumers and on high gasoline taxes, which amount to 56.5 cents a gallon on O'ahu.

"We have the highest gasoline taxes in the country and for what? We have the worst roads I've seen than in any place I've lived in," he said.

Because of high prices in the West, California is again the state with the most expensive gasoline at $2.159 per gallon yesterday, overtaking Hawai'i's average of $2.094.

Oil companies, meanwhile, awash in first-half profits, are continuing to make money from the record gasoline prices that are pinching motorists.

"Refining is a feast or famine business, and it's a festive orgy right now," says Tom Kloza, chief oil analyst at Oil Price Information Service. Last week, refiners in some markets could buy oil for about $30 a barrel, refine it all into gasoline and sell the gas for $69. That's a $39 profit vs. $4 to $10 normally.

"Some are looking at their bottom lines and saying, 'A few more days of this and we've made our year,' " he says.

The oil industry acknowledges it benefits from high prices but insists it's not causing them.

"We're at the whims of oil and gas prices that are set beyond our control" by commodities traders, says Tom Cirigliano, spokesman for oil giant ExxonMobil. It reported $11.2 billion profit in the first half — up 138 percent from a depressed first-half 2002 and nearly as much as it earned all of last year.

"When the companies report profits, they are big profits because of the size of the industry, but we're below-average as an industry," notes John Felmy, chief economist at the American Petroleum Institute, a trade organization. He says the oil industry earned 5.4 cents per $1 of revenue in the second quarter, while the average for all industries was 6.4 cents per $1.

Speculators, traders and wholesale distributors "got very jittery last week, worried about the availability of supply, and they bid up prices," says Justin McNaull, spokesman for motorists organization AAA. As those wholesale prices went up, so did pump prices.

Supply fears keeping prices up:

• The switch to winter-blend gas Sept. 15 could cause brief shortages.
• A Phoenix pipeline break this month reminded traders how fragile the fuel distribution system is.
• Eight refineries shut during the power blackout in the Northeast haven't fully resumed.
• Motorists used a record average 9.7 million barrels of gasoline a day last week, the Energy Department reports.

Kloza thinks gas prices will "drop like a rock" by mid-September, eroding oil company profits. "Over the course of a year, profits are not obscene, but there are obscene periods. This is one."