High price of gas
fails to sway isles

Only 44 percent favor
a state inquiry,
says a poll

By Rob Perez
Star-Bulletin

Big Island resident Ray Lanchis is so upset about Hawaii's high gas prices he doesn't look at the per-gallon charge when he fills his car tank.

The amount, he said, would only sicken him.

The retired businessman says the state should investigate Hawaii's highest-in-the-nation prices, even though the last investigation several years ago uncovered no evidence oil companies were making excessive profits.

But circumstances today demand a new look, Lanchis said.

"The oil companies charge whatever the hell they damned well please," resulting in price gouging, he said.

Lanchis' views, however, are not universally shared by Hawaii residents.

Half of those who responded to a recent Honolulu Star-Bulletin/NBC Hawaii News 8 Poll opposed the state spending more tax dollars on another investigation.

Some 44 percent favored an investigation, while 6 percent were unsure.

But because the poll has a margin of error of plus or minus 5 percentage points, potentially enough to reverse the results, it's unclear what position a majority of Hawaii's people take on the issue.

Makakilo resident Majorie Hills is among those who oppose a new inquiry.

She believes the findings would be no different from what investigators concluded previously.

"I don't think we should spend money for another investigation that goes nowhere," Hills said.

She said Hawaii gas prices seem reasonable and reflect the high cost of living in a remote island state.

"You pay a price for living in paradise," Hills said.

"If you don't want to, you move to the mainland and get gas for slightly over $1 (a gallon)."

Oahu prices typically range from $1.54 to $1.60 a gallon for regular unleaded gas, and on the neighbor islands prices are as much as 25 cents more a gallon.

A Star-Bulletin investigation has disclosed data indicating the oil companies are making tremendous profits at those prices, especially given the plunge in crude oil costs over the past year and a half.

The companies defend their pricing as fair, saying competition largely dictates how much they charge motorists.

But Gov. Ben Cayetano, partly because of the Star-Bulletin coverage, has asked the attorney general's office to take a closer look at the situation. The state recently solicited proposals from law firms nationwide in case it needs help with possible litigation against the oil companies.

The attorney general's office is considering suing the companies to recover alleged overcharges for gasoline at the wholesale level. Those prices have a major effect on what dealers charge Hawaii motorists. A spokesman for the attorney general's office declined comment.

Michael Neeley, Hawaii pricing manager for Chevron, said the poll results suggest half the people "don't think (a new investigation) will be worth the money spent."

He said Chevron will cooperate if one is launched but doesn't expect the findings to be any different from before.

Many of the poll respondents, however, blame the industry for Hawaii's high gas prices.

Asked to pick among five choices on what is mostly to blame for those prices, 38 percent -- the largest chunk -- selected the oil companies.

The second most common answer: the cost of doing business in Hawaii, cited by 36 percent.

Respondents also were asked how much a gas station would have to drop its price to get their business regularly.

Among the five choices provided, a 5-to-10-cent-a-gallon drop was the top pick, chosen by 44 percent.

But 35 percent said prices had to fall more than 10 cents a gallon before they would switch, while 10 percent indicated they wouldn't switch at any level.

Some industry observers say such numbers show Hawaii gas

consumers aren't as price sensitive as their mainland counterparts. In California, for instance, changes of only a few cents a gallon can significantly affect consumer behavior, they say.

Neeley said the fact that nearly half the respondents indicated they would switch only with a big price drop or would not switch at all suggests the industry is providing the service and quality customers want.

Russ Winer, a marketing professor at the University of California at Berkeley, said the results underscore two important factors: "Gas buyers are very sensitive to location and brand."

The statewide telephone poll of 439 registered voters was conducted May 29-June 3 by Mason-Dixon Political/Media Research of Columbia, Md.