Hawai'i gas among priciest

By James R. Healey
USA Today

About 500 gas stations are charging $2 or more for a gallon of regular gasoline, according to data from roughly 100,000 stations in markets of all sizes.

The highest gas prices mainly are in Hawai'i and California, though they have begun to show up in the central and eastern United States — Nebraska, Missouri, Ohio, New York and Massachusetts, for example — signaling how much, and how widely, last week's run-up in crude oil prices affected wholesale gasoline prices.

"We've had as much as 4- or 5-cent increases in one day, some pretty dramatic changes," says Burnie Higginbotham Jr., president of Higginbotham Oil in Pelham, Ala.

Higginbotham takes some heat even though his convenience-store stations are selling regular unleaded for $1.59 to $1.63 a gallon, close to the statewide average of $1.60.

He says he pays about $1.45, including taxes, and "I need a 14- or 15-cent margin to break even."

The nationwide average for regular unleaded is $1.655, motorists organization AAA reported yesterday. Highest state averages: Hawai'i, $1.886, and California, $1.863.

The price of regular unleaded in Hawai'i rose a penny yesterday, which helped push prices at the pump up nearly 10 cents a gallon during the past month.

The price of oil accounts for about 45 percent of the price of gasoline. State and federal taxes vary widely, but average about 30 percent of the price. The rest mainly is split between refiner and retailer. The retailer's margin has shrunk to an average 6.5 cents a gallon, according to the Oil Price Information Service.

Motorists in perennially high-price Western states seem to be getting used to $2-plus gasoline.

"Some people are wondering why it's that much, but it's not like I have to explain every time I go out to the pumps," says Louis Legarde, who works at Menlo-Atherton Shell in Menlo Park, Calif.

The station is selling self-service regular for $2.09 and full-serve for $2.60.

Gas prices tend to rise first and fast in places distant from pipeline terminals and where blends of anti-pollution gasoline are required.

Diesel fuel continues to set daily records, averaging $1.74 according to the AAA report yesterday. That squeezes independent truckers, who say they can't easily renegotiate their freight-hauling contracts or add fuel surcharges.

Factors pushing fuel prices up:

• Possible war with Iraq, which would curtail oil shipments.
• Lowest U.S. stockpiles of commercially available crude oil since 1975 — so little, in fact, that fuel shortages are possible.
• A strike by senior Nigerian oil workers, which could disrupt oil supplies from there, though it's had no immediate impact.

Factors pushing prices down:

• Delays in U.S. attacks on Iraq.
• Return to near-normal oil shipments from Venezuela.

In London, benchmark Brent crude oil fell 50 cents yesterday to $32 a barrel.

U.S. oil markets were closed for Presidents Day.