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The Honolulu Advertiser
Posted on: Sunday, June 18, 2006

Slaves to the pump

By Dan Nakaso
Advertiser Staff Writer

When gasoline prices rise, "We just have to suck it up," said Jenny Munchbach, holding the car door open for her daughter, Samantha, 5, at the zoo parking lot in Waikiki. The Munchbachs and other Island families said they're eating out less to help offset the cost.

REBECCA BREYER | The Honolulu Advertiser

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Ranit Kirschenbaum stared at her 1996 Infinity last week with resignation over gasoline prices that continue to average more than $3.20 per gallon.

Like other Hawai'i drivers, Kirschenbaum — a 28-year-old entomology graduate student at the University of Hawai'i — knows she should try to conserve her precious fuel by car-pooling more, keeping her tires properly inflated and reducing the amount of stuff she lugs around in her trunk. In reality, Kirschenbaum has instead adjusted to higher gasoline prices by cutting down in other areas like shopping and dining out.

"It's taken its toll and it hurts me more," Kirschenbaum said. "But there's nothing I can do about it."

It's been 10 months since the price of a gallon of regular shot up past $3 on O'ahu, and the response from drivers has been a resounding — albeit reluctant — yawn of acceptance.

"There's not much we can do about it," said Jenny Munchbach, who lives on the Aliamanu Military Reservation with her Army husband and their two children. "We just have to suck it up."

Munchbach and other drivers said they've cut back on extras like meals out. And in the first few months after gasoline prices settled in at $3 a gallon and more, businesses across the Islands reported commensurate drops in revenue of 10 percent to sometimes 50 percent.

Since then, Jack Suyderhoud, a University of Hawai'i business economics professor, can't find any evidence that rising gasoline prices have hurt Hawai'i's red-hot economy, which has had the lowest unemployment rate in the country for 24 straight months.

"People say they're cutting back on discretionary spending on things like movies, dinners and parties," Suyderhoud said. "What's surprising is how little impact higher gasoline prices have actually had on the overall economy up to this point."

Drivers could be racking up charges for gas on their credit cards — along with other discretionary expenses — which would only delay the hit on their personal budgets, Suyderhoud said.

"It's pretty tough to make that work in the long run," he said. "You have to cut back on spending."

Ridership on TheBus rose nearly 8 percent from April 2005 to April 2006, partly in response to rising fuel prices, bus officials speculated. But the economy also could have pushed up bus ridership as more people head to work — and can't find parking, officials said.

Suyderhoud has not seen any overall evidence that drivers like himself are making large-scale efforts to conserve fuel.

"Properly inflating tires?" Suyderhoud asked. "Let's not get crazy. I'm kind of lazy."

Gas station owners and operators say they make little profit on fuel sales. The real margins at places like Kahala Shell come from extras like the station's car-wash operation, repair business and sales of food and drinks in the station's store, said Bill Green, a former owner and now consultant to Kahala Shell.

Green initially worried that higher fuel prices would cause customers to cut down on spending on the money-making sides of Kahala Shell's business.

"But we haven't seen any real change," Green said.

"I think people are adapting," Green said. "They certainly don't hesitate to spend $2, $3, $4 or $5 on food items."

Ernie Choy, owner of The Deli at the He'eia Kea Small Boat Harbor in Kane'ohe, originally saw revenue fall by 10 percent as gas prices went up and some people stopped fueling their boats — and cut back on purchases at his deli and store.

Since then, boaters have filled the harbors over the recent three-day weekends and have kept a steady flow of business through Choy's retail operations.

"They spend the extra dollars," Choy said. "It's kind of stabilized. I think they've come to accept higher prices. It's summer. The kids are out of school, and they're trying to have a great time. I think they're over the anxiety of chasing around for the best price week to week."

So drivers like 19-year-old Ashley Gifford of Makiki have now come to accept the higher prices.

"It's gotten so out of control," she said after filling up her 2004 Honda CRV. "But I've gotten accustomed to paying it."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.