Gas prices jump next week
The wholesale cap will rise 14 cents as several factors squeeze the mainland market
After starting the year off on the decline, the state's price caps on wholesale gasoline are set to increase sharply next week.
Price caps for next week, which were set yesterday by the Public Utilities Commission, are 14 cents higher than current price ceilings. It marks the first double-digit move since the week of Oct. 31, when the caps were set 18 cents lower than the previous week.
Since then the price caps -- which are based on spot prices in three key mainland markets -- have fluctuated a few cents up or down each week as the price of crude oil reacts to market forces on the mainland.
Oil prices rose yesterday in a continuation of bull-market sentiment that drove crude futures $2 higher earlier this week.
Analysts attributed the big jump in oil prices this week partly to a Russian-Ukrainian natural gas dispute in which Russia cut pipeline runs, raising fears about the stability of global supplies.
They also said some investors looking for better returns than U.S. stock markets have delivered in the past year are piling into energy futures, creating unusually high demand for crude oil, gasoline and heating oil contracts.
The start-of-the-year rally also has been fueled by concerns created by a declaration from a top official in Tehran that Iran, a top oil producer, will resume research into nuclear fuel production -- a comment that raised concerns about the country's nuclear weapons ambitions.
"A rise in Hawaii gas prices is to be expected when prices on the mainland rise, but when prices fall, unlike the past, our prices will also fall," said House Majority Leader Marcus Oshiro (D, Wahiawa-Poamoho).
Hawaii's prices continue to lead the nation.
Yesterday's statewide average for regular was $2.68 a gallon, 45 cents above the national average, according to AAA's Fuel Gauge Report, which bases its survey on credit card transactions from the previous day.
Next week, if wholesalers charge up to the maximum allowed, the cheapest gasoline in the state is projected for Oahu, at $2.68 a gallon. The most expensive gas is forecast for Lanai, at $3.05 a gallon, while the statewide average could go to about $2.85 a gallon.
Star-Bulletin estimates assume a dealer markup of 12 cents, although such charges vary among dealers and are not governed by the price cap law. Pricing strategies have led to wide variances in prices among gas stations, leading to more competition at the retail level.
The Associated Press contributed to this report.