Tax raises Maui gas prices
By Sean Hao
Advertiser Staff Writer
Maui gasoline prices hit an all-time high of $2.31 a gallon during the holiday weekend and remained there yesterday.
The average is up 5 cents since July 1, when a 5-cent increase in county gasoline taxes took effect — raising the tax to 18 cents a gallon. The Maui County Council approved the tax increase as part of the county's budget for fiscal 2004, which started July 1.
The tax, which is collected by gasoline wholesalers, is passed along to retailers and ultimately to consumers. At Uptown Chevron in Wailuku, owner Alvin Makimoto put up a sign attributing the surge in prices to the tax increase.
"Most of the people, of course, they don't like it," he said. "It's shocking to me to be at $2.30 for regular unleaded. It's too high."
According to a survey by AAA Auto Club, the average $2.31 a gallon for regular, self-serve gasoline in Wailuku is up from about $1.86 a year ago. That compared to an average of $1.97 a gallon in Honolulu yesterday.
Under the new rates, Maui drivers now pay 1.5 cents more per gallon in county taxes than those in Honolulu. The remainder of the disparity between O'ahu and Maui prices is typically attributed to the higher cost of distributing gas to the Neighbor Island and higher labor costs. As a smaller, low-volume market, Maui also draws less competition, which can result in higher prices. Similarly, gasoline prices in Kona and on Lana'i and Moloka'i also run substantially higher than in Honolulu.
Other factors that are commonly cited for Hawai'i's gas prices — which are once again the highest in the nation — are a lack of competition at the wholesale level and the state's high taxes and low-volume refineries that process expensive forms of crude oil.
Maui driver Autumn Crisp of Makawao said she's noticed the sudden spike in Maui gas prices. She says the increase means it costs more for her to get to and from work.
"I can't really drive any less," she said.
"If you tell people on the Mainland how much we pay for gas they laugh."
In an attempt to rein in Hawai'i's high gas prices, legislators last year passed price controls that are scheduled to take effect next summer. The law ties gas prices to the West Coast markets where prices at the pump have fallen substantially.
If the price caps were in effect today, regular prices would be capped at about $1.82 a gallon in Honolulu's and $1.92 a gallon on Maui. However, the issue of price controls remains controversial because of concerns that caps could result in higher prices as well as shortages.
Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.
