to climb again
The cost of regular unleaded on Oahu could
increase about 25 cents to $3.30 a gallon
After two straight weeks of decline, price caps on wholesale gas in Hawaii are expected to increase 25 cents next week, while motorists everywhere wait to see whether prices will go higher as the oil industry assesses damage inflicted by Hurricane Rita.
The Public Utilities Commission is scheduled to post caps for next week today.
According to estimates by state House analysts, the maximum prices at which wholesale gas can be sold is expected to have a baseline price of $2.28 a gallon, a quarter more than a week ago.
If refiners and wholesalers charge up to the maximum allowed, the cost for regular unleaded on Oahu would be about $3.30 a gallon, including all adjustments, taxes and an assumed dealer markup of about 12 cents. Prices would be about $3.41 on Kauai; $3.46 on Maui; $3.38 in Hilo and $3.40 in Kona.
The new cap reflects an increase in wholesale gas prices in three mainland markets -- the Gulf Coast, New York and Los Angeles -- upon which the state's price cap formula is based. Prices across the country were expected to rise following Rita, the second hurricane this month to shut down significant oil facilities in the Gulf Coast.
However, because the weekly caps are posted each Wednesday -- based on data from the five previous business days -- Hawaii has seen a slight lag before island prices mirror mainland trends.
"We expected gas prices to rise next week due to the effects of Hurricane Rita," said House Majority Leader Marcus Oshiro (D, Wahiawa-Poamoho). "It's positive that consumers are now shopping around for the best prices and timing their purchases now that we can anticipate trends."
Price cap opponents say the new law has brought volatility and instability to Hawaii's gasoline market.
Hawaii's prices have been the highest in the country since last week, topping out yesterday at $3.27 a gallon for regular unleaded, according to AAA's Fuel Gauge Report.
Although that price is down a penny from the day before, it was still 23 cents higher than runner-up Washington, D.C., and 46 cents higher than the national average, AAA said.
The national average of $2.81 a gallon was up a penny from the previous day and could climb higher as traders and analysts awaited the weekly report on the nation's oil supply from the U.S. Department of Energy.
Most analysts expected drops in inventories of crude oil and refined products such as gasoline and heating oil.
About a dozen refineries in Texas and Louisiana remained shut down this week because of Hurricanes Rita and Katrina. Several refineries in Texas could take weeks to fully resume operations.
Analysts note the national retail average for gasoline is more than 20 cents higher than a month ago, before Hurricane Katrina struck the Gulf Coast, and motorists shouldn't expect any declines soon.
"People are recognizing that gas supplies are going to be tight for a while," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York.
Meanwhile, the state Public Utilities Commission stood by its decision last week to extend deadlines for oil companies, wholesalers and jobbers to provide reports showing they are in compliance with the law, which took effect Sept. 1.
The commission on Sept. 12 had asked oil industry officials to submit reports including information such as prices charged for each grade of gasoline, volumes of gas sold, any and all charges included in transactions, the pre-tax price per gallon and total transaction amounts.
Reports were due last week Monday, but oil companies asked for an extension, saying they needed additional time to gather data. Officials also noted that much of the data being sought was proprietary information containing trade secrets that could fall into the hands of competitors.
The commission extended the deadline to Oct. 17 and changed the regular reporting period from a weekly to monthly basis.
Oshiro criticized the decision, saying the commission should require the information sooner to ensure that oil companies are complying.
In a letter last week, Oshiro asked PUC Chairman Carlito Caliboso for detailed answers as to why the PUC agreed to change the reporting periods.
Caliboso said the PUC felt one month was a reasonable amount of time for oil companies to obtain a protective order and compile all information being sought.
He noted that many of the wholesalers and jobbers required to make the reports were small businesses with limited staffs.
"The law is new, and to comply will require those businesses to set up data collection and reporting systems not previously in existence," Caliboso said.
The Associated Press contributed to this report.