Hawaii gas prices
still highest in nation

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By Jaymes Song
Associated Press

While gas prices nationwide are the lowest in three years and are falling closer to $1 a gallon, Hawaii motorists are still paying the highest prices at the pump.

Hawaii's gasoline prices have dropped 15 percent from its highs last year, but still remain the highest in the nation by far, according to AAA. Nationwide, prices have fallen about 35 percent from 2001 highs.

The average price Wednesday of regular unleaded gas in Hawaii was $1.71, the automobile association said. That was 61 cents more than the nationwide average of $1.10. Alaska was second at $1.50 per gallon.

Motorists in Georgia were enjoying the lowest average at 97 cents per gallon. California was at $1.13, while Washington state was at $1.20.

Hawaii, which only has only two oil refineries operated by Chevron Corp. and Tesoro Hawaii Corp., has historically had the highest gasoline prices in the nation.

"Consumers here have been getting ripped off forever," said Frank Young of the Hawaii Automotive Repair and Gasoline Dealers Association.

The state apparently agrees.

The state has filed a $2 billion antitrust claim against oil giants Chevron, Shell, Texaco, Unocal and Tosco, claiming the companies engaged in fixing gas prices for years.

A federal court ruling is pending on a motion by Hawaii's gasoline wholesalers to dismiss the lawsuit. The trial is expected to begin this summer.

"The state's allegation in the lawsuit is that the prices are high because the defendants agreed not to compete," said San Francisco attorney Spencer Hosie, who is representing the state.

Lawyers for the oil companies have said Hawaii is a market with few sellers and a stable demand. Therefore, competitive pricing would result in cutting into profits and not be in the best interest for the companies.

"The simplest explanation is two words: no competition," said Jeff Spring, spokesman for the Automobile Club of Southern California, which oversees Hawaii.

Spring said prices in southern states, such as Arkansas ($1.07) and Alabama ($1.06) are low because of competition and the number of oil pipelines that run through those states.

With a limited number of refineries and retailers in Hawaii, "you're kind of at their mercy," Spring said.

Young, whose family has operated a Chevron station in Honolulu for 49 years, said while gas station owners are making a couple cents per gallon after taxes and fees, the oil companies are reaping huge profits.

"The margin's fat," he said. "What they're making on a gallon of gas is obscene."

A Chevron spokesman was not available for comment. A Tesoro Hawaii spokeswoman said the company was unable to comment because of the pending lawsuit.

Spring said tourist destinations can also keep prices high, as evident in Hawaii as well as San Diego and San Francisco. In San Diego and San Francisco, prices were 20 and 41 cents higher, respectively, than Los Angeles on Wednesday.

On Maui, motorists are paying about 30 cents per gallon more than Oahu.

The average gasoline price in Wailuku was $1.97 per gallon, compared with $1.64 for Honolulu, the automobile association said.