Gas prices set to fall a few cents next week
After two consecutive weeks of increases, Hawaii's price caps on wholesale gasoline are expected to fall a few cents next week.
The decline comes as crude oil prices fell in response to warmer weather in the United States that would presumably lower demand for home heating fuel.
Next week's price caps are expected to drop by about 2 cents, according to preliminary calculations by the Star-Bulletin. If wholesalers charged up to the maximum allowed and dealers added a markup of 12 cents, the price for regular unleaded on Oahu is forecast to be about $2.57 a gallon, the cheapest in the state.
The most expensive gas would be about $2.94 a gallon on Lanai, while the statewide average is projected to be about $2.74 a gallon.
Yesterday's statewide average was $2.67 a gallon, 46 cents above the national average and 15 cents above the next-highest state, Alaska, according to AAA's Fuel Gauge Report, which bases its survey on credit card transactions from the previous day.
The Public Utilities Commission publishes the new price caps on Wednesdays.
Caps have gone up 7 cents in each of the past two weeks, as wintry weather in parts of the mainland fueled demand for heating oil, in turn driving up crude oil prices in key markets.
Hawaii's caps are tied to an average of spot wholesale listings in the U.S. Gulf Coast, New York and Los Angeles, where prices track closely to crude oil futures.
Crude oil prices fell yesterday as temperatures rose in New York and throughout the U.S. Northeast, the world's largest market for heating oil. But the milder weather was expected to be short-lived, forecasters said.
"It's a week where the East gets a break in the cold weather, but it will not last very long. During the holiday week, the cold and snowy weather returns," Accuweather.com predicted Sunday.
Mike Fitzpatrick of brokerage firm Fimat USA Inc. said that while mild U.S. weather was keeping downward pressure on oil futures, their late November lows of around $55 were likely "out of reach" for now.
Star-Bulletin estimates are based on a four-day average of prices listed by Bloomberg News Service, which vary slightly from the benchmarks used by the PUC in setting the weekly price caps.
Actual caps are based on a five-day average of benchmarks set by the Oil Price Information Service and have varied from the Star-Bulletin projections by as little as a fraction of a cent to as much as 5 cents.
The Associated Press contributed to this report.