Isle gas dips below $3 but still is highest
Prices on the decline nationwide could rise again during winter
While Hawaii remains the only state where the average cost for regular gasoline remains above $3 a gallon, the average pump price in Honolulu has dipped below that mark for the first time since early September, according to auto club AAA.
Honolulu's average price was $2.98 a gallon yesterday, 26 cents lower than last week, AAA Hawaii said.
The city average first topped $3 around the second week of September, soon after Hurricane Katrina made landfall in the Gulf Coast, crippling the nation's oil refining capacity.
Nationwide, prices have declined as more oil facilities have recovered from Katrina and Hurricane Rita, and demand has eased. However, analysts warn that prices could soar if oil supplies are not able to keep up with demands for winter heating oil.
Hawaii prices have dropped dramatically in the past two weeks as wholesale price caps on gasoline have declined.
The prices caps, set each week by the Public Utilities Commission and representing the maximum at which gas can be sold at wholesale, have dropped 56 cents in the past two weeks.
Next week's caps are 18 cents lower than current price ceilings and could bring the statewide average below what it was on Aug. 31, the day before Hawaii's one-of-a-kind price cap law took effect.
Meanwhile, Hawaii's statewide average of $3.06 a gallon for regular continues to lead the country, coming in 25 cents higher than the next-highest state, California, according to AAA's Fuel Gauge Report.
The national average yesterday was $2.55 a gallon, 2 cents down from the previous day, AAA reported.
Supporters of the price cap say the recent drops show the law is working by forcing Hawaii prices to track more closely to mainland trends. Caps are based on a weekly average of spot prices in the Gulf Coast, New York and Los Angeles.
"Now that we're coming out of the hurricane season, we'll probably see less volatility of price spikes at the gas pumps," said House Majority Leader Marcus Oshiro (D, Wahiawa-Poamoho).
Opponents say Hawaii's prices would not have risen so swiftly but for the cap, because the island's refineries obtain their oil primarily from Asia and Alaska.
"We're still at the No. 1 position," said Melissa Pavlicek, a spokeswoman for the Western States Petroleum Association, an oil industry trade group. "It looks like the amount that our prices are above the national average seem to be even larger than it may have been before the cap, so I'm not sure that the cap is, in fact, working."