Gas price decline to continue next week
Regular should fall for a fourth week, to about $2.56 on Oahu
With Hawaii's average price for regular gasoline set to drop below $3 a gallon for the first time in almost two months, price caps on wholesale gas are likely to bring the cost down a few cents more next week.
The Public Utilities Commission is scheduled to publish next week's caps later today.
Preliminary calculations by the Star-Bulletin indicate a drop of about 6 cents -- the fourth straight week that price caps have declined. The caps, which represent the maximum price at which wholesale gas can be sold, have fallen 76 cents since Oct. 17.
Next week, if wholesalers charge up to the maximum allowed, the price for regular unleaded on Oahu is projected to be about $2.56 a gallon after taxes. The highest-priced gas would be on Lanai, at $2.93 a gallon.
Estimates assume a dealer mark-up of 12 cents, although such charges vary from station to station and are not governed by the price cap.
Gov. Linda Lingle said she expects motorists to be pleased by the price drops, but she continues to have concerns for gas station owners.
"When the price starts to drop, and the cap is artificially low on the wholesalers, it could put people out of business," Lingle said. "It could create shortages, and that's when the concerns would really start to pile up."
The price caps are tied to an average of spot prices in the Gulf Coast, New York and Los Angeles.
Oil prices nationwide are still about 20 percent higher than a year ago, amid concerns that supplies could be tight this winter because of hurricane-related damage to platforms and pipelines in the Gulf of Mexico.
Recovery efforts have been slow. The U.S. Minerals Management Service said yesterday that 67 percent of daily oil production and 53 percent of natural gas production in the Gulf remained off-line, slightly lower than Monday.
Prices at the pump hit record highs in September after two major hurricanes ravaged oil facilities in the Gulf Coast.
Hawaii prices, like elsewhere, have steadily declined since reaching a record high of $3.68 a gallon on Sept. 18.
Yesterday the statewide average fell a penny from the previous day and settled at $3 a gallon, 52 cents above the national average, according to AAA's Fuel Gauge Report. The statewide average first topped $3 on Sept. 6.
Hawaii's price cap law does not regulate what stations may charge, leading to different strategies among owners. Some have reflected the weekly price cap changes immediately, while others have been slower to drop prices.
A Chevron station on Keeaumoku and Beretania streets dropped its price for regular on Monday to $2.69 a gallon, the same price it was selling yesterday across the street from a 76 dealer with regular priced at $2.71 a gallon.
A Shell station on Ward Avenue was selling regular for $2.80, while Lex Brodie's Tire Co. around the corner was a penny cheaper.
AAA's Fuel Gauge Report surveys 222 gas stations in Hawaii, including 130 on Oahu, 39 in Hilo, 35 on Maui and 18 on Kauai. Prices listed are combined averages of the last credit card swipe of the previous day at those stations.
The Star-Bulletin's gas price calculations are based on prices listed by Bloomberg News Service, which vary slightly from benchmarks published by the Oil Price Information Service that the PUC uses in determining the price caps. Price cap calculations using Bloomberg data have varied from the PUC figures by as little as a fraction of a cent and by as much as 5 cents.
The Associated Press contributed to this report.