Tesoro Corp. has suspended local gasoline production indefinitely because of lingering problems related to a power outage caused by the weekend's heavy rain.

Tesoro, the state's largest oil refiner, said it does not expect local gasoline supplies to be disrupted. Generally Tesoro has an inventory equivalent to two weeks of gasoline supply. However, the problem, which started Sunday, will drive up the refinery's operating costs — and that could increase pressure to raise pump prices.

"The repairs are now under way and right now it's difficult to say how long it's going to take to complete," said Tesoro spokesman Nathan Hokama.

In the meantime, Tesoro is working with other local gasoline suppliers and may resort to importing gasoline to meet local demands. Either way, costs are likely to rise.

"At the supply level, because of supply-and-demand dynamics, we do expect prices to rise because of the tight supplies and the price levels that are required to attract supplies from these alternate markets," Hokama said. "When people know you have a refinery issue, naturally they're going to know you're going to need supply, so naturally their prices are going to rise.

"Right now it's difficult to speculate what that will ultimately mean for consumers in terms of product prices. At the consumer level it really depends on market dynamics."

Tesoro now expects its Kapolei refinery output of all refined products to be in the range of 70,000 to 80,000 barrels per day during the current quarter, with direct operating expenses in the $2.60 to $3.20 per barrel range. Prior guidance was 80,000 to 85,000 barrels per day with expenses of $1.85 per barrel. The Kapolei facility's maximum refining capacity is 95,000 barrels per day of crude oil.

A spokesman for Chevron, which operates Hawai'i's only other refinery, could not be reached for comment.

Ted Liu, director of the state Department of Business, Economic Development and Tourism, said Tesoro had reassured the agency that gasoline supplies should not be disrupted.

"They've assured us that they have sufficient gasoline and jet fuel in storage to meet their short-term commitments," Liu said.

The agency, which is one of the state's top energy emergency advisers, would not speculate on whether Tesoro's problem will affect pump prices.

Reach Sean Hao at shao@honoluluadvertiser.com.