Gas prices likely to drop Monday
By Greg Wiles
Advertiser Staff Writer
By Greg Wiles
Hawai'i motorists, who are enjoying falling gasoline prices this week, can expect more of the same next week.
Stations began lowering pump prices yesterday — Costco in Honolulu dropped to $2.84 for a gallon of regular — as the state's new wholesale price cap was cut by 12 cents. With gas prices falling on the Mainland, Hawai'i's gas cap will likely drop another 18 cents next week.
The state sets a limit on wholesale prices each week based on five days of Mainland prices. With four of those five days in the books, it appears prices will decline next week by about 18 cents, according to Advertiser calculations. The official cap for next week will be announced tomorrow.
Next week's price reduction would be added to declines of 12 cents this week and 44 cents on Oct. 17, mirroring rapidly falling prices on the Mainland. Pump prices are receding as people cut back driving and as more refinery capacity comes back after hurricanes Katrina and Rita.
"I'm officially predicting sub-$2 gasoline by this weekend" in some states, and a U.S. average of $2.25 or less, veteran pump-price watcher Tom Kloza at the Oil Price Information Service told USA Today.
Kloza said average pump prices nationwide should bottom out at about $2.10 this winter.
Hawai'i still has the highest gasoline prices in the nation and is the only place where a gallon of regular averages more than $3 statewide, according to the American Automobile Association's Daily Fuel Gauge Report.
The average Honolulu motorist paid $3.087 for a gallon of regular on Sunday night, while the national average was $2.624. Sponsors of the gas cap legislation contend a more appropriate comparison is with Mainland prices 10 days ago. At that time the average nationally was $2.75.
Despite the recent drop, Hawai'i prices remain too high for some drivers.
"It's not enough," said Richard Han, 62, who has cut back driving his taxi cab on O'ahu because of mounting fuel bills. "I can remember six months ago, we were paying something like $2.05."
While that may be true, most drivers are relieved that pump prices are down from the high of $3.59 a gallon on O'ahu reached in mid September.
Costco and Lex Brodie's, generally among the pricing leaders on O'ahu, chopped prices yesterday, reflecting the 12-cent decline in the state's wholesale price cap for this week. The cap is adjusted weekly and the new price takes effect each Monday.
Not all stations dropped prices yesterday as they waited to sell through older, high-priced inventory.
Lex Brodie's on Queen Street lowered its price to $2.85 a gallon for regular, but a Union 76 station on Waiakamilo Road was at $3.07 at midday.
Many O'ahu stations yesterday were still priced at $2.97 to $2.99 a gallon and are expected to lower their prices this week as they receive shipments of new, less-expensive fuel. The state's price cap doesn't regulate how much station owners can charge, only what refineries and others charge at wholesale.
Hawai'i's wholesale price cap went into effect on Sept. 1 and is the only one of its kind in the nation. Under the law, Hawai'i's wholesale prices are linked with those in New York, the Gulf Coast and Los Angeles. The law is an attempt to address consumer complaints about Hawai'i gasoline prices rarely falling when those on the Mainland do.
USA Today and Bloomberg News Service contributed to this report.
Reach Greg Wiles at firstname.lastname@example.org.