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The Honolulu Advertiser
Posted on: Friday, May 9, 2008

GAS PRICES
Drivers near 'tipping point' as Hawaii gas prices climb

 •  High gas prices hurt government services

By Mary Vorsino
Advertiser Urban Honolulu Writer

Hawaii news photo - The Honolulu Advertiser

At the corner of Rodgers and Aolele near the airport, gas cost more than yesterday's state average of $3.84.

JEFF WIDENER | The Honolulu Advertiser

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IMPACT OF GAS PRICES

City bus ridership: Up 5 percent in March from March 2007.

Vanpool Hawai'i: 42 new vans put on the road in the past six months, for a record total of 265.

Bike sales: Up 10 percent to 15 percent over the past few months.

Cutting back: USA Today Gallup poll released today shows 60 percent of Americans are trimming other expenses because of high gas prices.

Driving less: Three-quarters of poll respondents said they hunt for the cheapest gas available, and six in 10 share rides with friends or neighbors.

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With gas expected to hit $4 a gallon on O'ahu this summer, more and more residents are changing how they get around — filling city buses, sharing rides or even biking to work to lessen their pain at the pump.

Significant increases in bus ridership, Vanpool Hawai'i use and bike sales signal a dramatic shift in consumer behavior, say analysts, as people who didn't budge from the driver's seat through months of soaring gas prices now appear to have reached their limit and are seeking budget-friendly ways to commute.

The local shifts mirror national trends.

According to federal data and a USA Today/Gallup poll, Americans are driving less for the first time in nearly three decades as gas prices change their lives — from consolidating errands to save fuel to cutting household spending and seriously considering buying more fuel-efficient cars.

"The question is always, 'Where is the tipping point?'" said Dana Alden, marketing professor at the University of Hawai'i's Shidler College of Business. "From the data I've seen, it looks like we're very close to it, where people are starting to make real behavioral changes."

The Hawai'i average for a gallon of gas was $3.84 yesterday — up more than 50 cents from a year ago, according to AAA Hawaii. In Honolulu, the average was $3.76 a gallon yesterday, up about 19 cents a gallon from just a month ago, AAA Hawaii said.

CUTTING BACK ON TRAVEL

Residents and businesses alike are feeling the pinch.

Yesterday, drivers who hadn't given up their cars talked about driving less or without air conditioning. Others said something in their budgets would have to give if gas prices kept going up and up.

"I don't think we're ever going to see the price of gas go down again," said Nikko Tiahrt-Conrad, as she pumped regular gas — at $3.79 a gallon — into her tank at the Kapolei Chevron station.

Edward McHugh, 76, said he recently sold his van and bought a smaller, more fuel-efficient Scion. A retired seaman on a fixed income, McHugh said he also takes the city bus whenever he can.

"Everything is going up except for my income," he said. "We don't travel like we used to. We used to go around the island. It's too expensive now."

The pain on the Neighbor Islands, where gas is close to $4 a gallon or has topped that, is even more acute. At the Lihu'e Chevron on Rice Street, James Callejo was filling up his heavy-duty pickup, which easily takes $100 worth of gas.

"I hardly go cruising around anymore. I go from home to work," said the Kalaheo resident, who gets about 11 mpg.

Big Island resident Kapi'olani Sibayton, 48, was visiting O'ahu's North Shore yesterday after figuring that she had better use her frequent flier miles before fuel prices creep any higher. She said the higher cost of fuel has spurred her to share rides.

"I'm hoping this is just a scheme to make us carpool," she said.

For businesses, the higher gas prices are eating away at their bottom lines.

Bob Swartz, who owns Chevron stations in Kailua and Kane'ohe, said he's had to change the price on the pumps as often as once or twice a week lately to keep up. But he said he's squeezed like everyone else because while his profit margin has remained the same as the wholesale price skyrockets, the volume of customers has decreased.

"I'm working on the same margin as I was 15 or 20 years ago," Swartz said.

And businesses that use fuel to deliver a good or service — from pizza delivery carriers to tour operators to landscapers — have to make tough decisions.

James Bruce, owner of American Landscape Services, said he raised prices for lawn service last year because of the soaring cost of gas. He uses gas in his lawn equipment, along with the trucks to carry the equipment to work sites. Now, he wants to raise prices again to keep up with the cost of doing business, but he fears he'll scare away customers.

"It's just taking a bite out of my wallet," he said.

TRIMMING EXPENSES

The high gas prices are also having a trickle-down effect, economists say, as people pinch every dollar. The USA Today/Gallup poll released today shows that about 60 percent of Americans are trimming expenses because of the high gas prices.

And three-fourths of Americans say they are getting tuneups, turning off the air conditioning and driving slower to improve mileage, while also searching for the best gas prices whenever possible. Americans are also driving less. February was the fourth straight month in which miles driven in the United States fell, federal statistics show.

There hasn't been a similar decline since 1979 — when gas shortages created long lines at pumps. In the 12 months ending in February, the latest month for which data are available, miles driven fell 0.4 percent from a year earlier. The last drop of that scale was in 1980-81. The decline, while small, is significant because the U.S. population and number of households, drivers and vehicles grow by 1 percent to 2 percent a year.

Many are predicting $4-a-gallon gas this summer in Honolulu. AAA spokeswoman Marie Montgomery said that could happen in July or August.

"It's just so hard to know," she said. "Crude oil is going nuts. It keeps on setting new records."

BUS RIDERSHIP UP

With high gas prices apparently here to stay, more people are turning to other ways of getting around. Honolulu bus ridership is up about 5 percent from a year ago, and the number of times a month drivers have to drive past waiting passengers because their buses are too full has doubled — to 800 a month this year, from about 400 a month last year.

Roger Morton, senior vice president at O'ahu Transit Services, which operates the city bus, said there has been some discussion about adding buses to busy routes to accommodate the extra passengers.

"It's getting to a point where our capacity on our busiest routes is an issue," he said, adding that the biggest ridership increases have been seen on routes from suburban areas to Honolulu.

Bus ridership is also up on Kaua'i, where an additional Hanalei-to-Lihu'e bus was added last week to meet demand.

Kaua'i bus ridership islandwide averaged 35,000 trips in April, up from 27,000 trips in April 2007, said Janine Rapozo, executive of the Kaua'i County Transportation Agency.

Staff writers Will Hoover, Eloise Aguiar and Diana Leone contributed to this report.

Reach Mary Vorsino at mvorsino@honoluluadvertiser.com.

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