Gas heads back to $3
The cost of crude oil drives an expected increase in the state's prices at the pump
The statewide average for regular unleaded could reach $3 a gallon next week as the state's price caps on wholesale gas are expected to increase for a second straight week.
Weekly price caps, which are set Wednesdays by the Public Utilities Commission, are forecast to rise 12 cents, according to preliminary calculations by the Star-Bulletin.
The increase comes on top of a 14-cent jump in this week's caps.
Island gas prices topped $3 a gallon in early September, following the devastation caused to Gulf Coast oil operations by Hurricane Katrina, and stayed there for just more than two months.
At Lex Brodie's Tire Co., where regular unleaded sold for $2.52 a gallon yesterday, motorist Cilvin Stewart said the latest potential increase was not surprising.
"I believe it," said Stewart, 41, of Makiki. "I don't like it but I've got no choice."
The statewide average for regular unleaded was $2.72 a gallon yesterday, 41 cents above the national average, according to AAA's Fuel Gauge Report, which bases its survey on credit card transactions from the previous day at more than 85,000 stations nationwide, including 222 in Hawaii.
Come Monday, if wholesalers charged up to the maximum allowed, the maximum price that gas could be sold at wholesale would range from $2.09 a gallon on Oahu to $2.43 on Lanai.
Those estimates do not include taxes or dealer markups. The amount that gas stations may add is not governed by the price cap and has varied as dealers determine different pricing strategies from week to week.
Markups appear to have ranged from 12 cents to more than 20 cents at various stations.
Assuming a dealer markup of 16 cents, prices at the pump are expected to range from $2.84 a gallon on Oahu to $3.21 a gallon on Lanai after taxes. The statewide average could go to $3.01, according to Star-Bulletin estimates.
Hawaii's caps are based on an average of spot wholesale prices in the Gulf Coast, New York and Los Angeles. Those prices track closely to crude oil futures.
While crude oil prices fell yesterday, the drop was unlikely to offset sharp increases from last week.
Over the course of last week, the first week of 2006, crude prices rose 5 percent to $64.21 a barrel Friday from a week earlier.
Analysts noted the falling dollar contributed to oil's rise last week, as oil is denominated in the dollar. But yesterday, the dollar rallied, helping to push oil back down below $64 a barrel for February delivery.
Warmer-than-usual weather in the United States is another factor in oil's fall yesterday, analysts said. In the Northeast, the largest consumer of heating oil, temperatures reached the 50s, and forecasters expect those springlike temperatures to continue through the week.
The Star-Bulletin's price cap estimates are based on a four-day average of spot prices listed by Bloomberg News Service.
Benchmarks vary slightly from prices listed by the Oil Price Information Service, which the PUC uses in determining the weekly price caps. Star-Bulletin projections have varied from the actual price caps by as little as a fraction of a cent to as much as 5 cents.
The Associated Press contributed to this report.