War worries, shortage causing gas prices to rise
By Sean Hao
Advertiser Staff Writer
Concerns about war in Iraq and a drop in crude oil supplies after a strike in Venezuela are starting to drive up gas prices in Hawai'i.
Prices remained stable statewide during a two-month rise in prices nationally. But in the past month, the price of a gallon of self-serve regular has risen nearly 5 cents, from a statewide average of $1.776 to $1.825, according to a survey by AAA Auto Club.
Maui may be among the counties hit hardest. In Wailuku, prices have risen nearly 10 cents, to $2.036 a gallon, during the same period.
Janine LaFleche, owner of Wailea Limousine Service in Wailuku, said higher prices take a toll on profits. The transportation company can't recoup the added expense with higher rates, because limousine rates are fixed by the state, she said.
"I don't even look at the price" of gasoline, LaFleche said. "What can I do about it? That's just one more dent to the bottom line."
Alvin Makimoto, owner of Uptown Service station in Wailuku, said area gas prices spiked after higher wholesale prices rose and service stations grew more willing to raise prices. The price of a gallon of self-serve gasoline at Uptown went from $1.91 a month ago to $2.03 yesterday, Makimoto said.
"Gas prices are set at what the market will bear," he said. "Often, one guy raises his prices and the next guy says that's a good idea and raises his prices."
Prices also are up in Honolulu, though not as much. The average for a gallon of regular rose to $1.742 from $1.705 a month ago, according to AAA Auto Club.
"Our prices have been increased only because our cost has gone up," said Scott Williams, general manager for Lex Brodie's Tire on Queen Street, where the price of a gallon of regular was $1.72 yesterday. That's up about 4 cents in six weeks, Williams said.
Nationally, the average retail price for regular gasoline rose for the sixth week running — to 145.9 cents a gallon, up 35.4 cents from a year ago — according to the Energy Information Administration, which collects and analyzes data for the U.S. Department of Energy.
Albert Chee, public and government affairs manager for Chevron Hawaii, blamed the rise on higher crude oil prices, a result of concerns about war in Iraq. Supplies from Venezuela, one of the top four U.S. importers, have fallen significantly since a labor strike began there two months ago.
In addition, Japan has boosted its purchases of crude oil to help satisfy domestic needs after nuclear power failures, Chee said. That has had a direct effect on the crude used in Hawai'i, he said. About 80 percent of the state's crude oil comes from the Far East.
The state's low demand for Venezuelan oil, little seasonality and tight competition among local suppliers probably helped keep fuel prices in check, said Doug MacIntyre, a senior oil-market analyst with the Energy Information Administration. But those factors could not insulate the state indefinitely.
"All things being equal, we would expect a crude oil price increase to impact everyone" over time, MacIntyre said.
Crude prices aren't expected to come down soon, he noted. "Barring an event relating to Iraq, we're expecting crude oil to remain at about $30 a barrel in the short-term.
"That translates into gasoline prices likely remaining steady."
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.
