Lana'i's $3 regular gas likely highest in nation

By Sean Hao
Advertiser Staff Writer

Honolulu drivers may grouse about the high cost of gasoline, but they won't get much sympathy from motorists on Lana'i who pay $3.07 a gallon for regular.

After a recent 13-cent price increase, Lanai City Service — the only public gasoline station on the island — has the highest price in the state and probably the highest in the nation. Lana'i may also have the distinction of being the first station in the country to break the $3 barrier for a gallon of regular.

"I think now it is the highest, yeah" said Jeffrey Spring, a spokesman for the national AAA travel club, speaking about the Lana'i prices. AAA surveys more than 60,000 stations in the United States daily. Although Lana'i drivers may be the first to pay $3, they probably won't be the last.

Already, the Hana Gas station on Maui charges $2.99 a gallon. O'ahu drivers pay a relatively cheap $2.25 a gallon. But that could rise as crude oil prices climb to record levels. Yesterday crude oil futures hit a record $48.88 a barrel in New York.

Hawai'i's gasoline prices are often the highest in the nation in part because its geographic isolation, high cost of doing business, lack of wholesale-level competition, and relatively small-size gasoline market. Prices on Lana'i are even higher because of added shipping costs, recent service station upgrades and low sales volume, said Randy Coon, Lanai City Service owner.

Many on Lana'i (population 3,200) view the high cost of gasoline and other goods as the price of living a rural life on an island just 18 miles long and 13 miles wide where almost everybody knows one another and people can leave their keys in their cars and homes unlocked.

High prices are something "you don't fight about, you just put it to the side," said Jarrod Barfield, a lifeguard at the community pool, who said he could walk to work if needed.

Lana'i City is just a couple dozen blocks wide and the longest commute on the island is a 13-mile round-trip from the town to the tourist resorts at Manele Bay.

"The price (of gas) is high, but no one really has to do all that much driving anyway," said Ron Gingerich, a fine art photographer who twice a week drives from Lana'i City to Manele Bay.

Still, stopping at the station on the corner of Eleventh Street and Lana'i Avenue can put a dent in the family budget.

"The last time I filled up, it cost me $50," Gingerich said. "That's the first time ever I've paid $50 for a tank of gas."

Despite the recent rise in gas prices, Lana'i gas station owner Coon said he's not making more money off gasoline sales. His price increases have only covered increases from his supplier Lanai Oil Co.

Coon says at his family-owned business — which also operates the attached Lanai Plantation Store, adjacent Dollar Rent-A-Car and a tour business — gasoline sales aren't the main money maker. "That's not the core of our business in terms of staying in business," he said. "But it's an integral part of our service to our community."

Terry McBarnet, president of Lanai Oil and vice president of Maui Oil Co., said Lana'i's high gasoline prices are a result of the island's low sales volume and the costs of shipping and distributing gasoline to such a remote area.

"Basically, you have significant overhead stuffed into very minimal sales," he said. "It's no fun selling at these prices.

"It's almost like being in the mortuary business — nobody likes you, but everybody needs you."

Apart from Lana'i and Hana, drivers on Moloka'i also have seen prices close in on the $3 a gallon mark. At Lucky's gasoline station at the Molokai Ranch in Maunaloa Town, the price for self-serve regular this week was $2.92 a gallon. Rawlins Chevron in Kaunakakai was serving up regular for nearly $2.88 a gallon.

For now though, it's likely that Lana'i's drivers pay the highest prices for regular in the country, said Frank Young, president of the Hawaii Automotive Repair and Gasoline Dealers Association. That excludes a smattering of special deals, including an incident earlier this year when a 76 station in Fullerton, Calif., sold full-service premium gasoline at more than $4 a gallon, which included free coffee and doughnuts.

"I don't think there's anybody in the country charging more than three bucks," Young said.

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.