Gas costs may fall another 18 cents

All islands could see prices below $3, with Oahu's rate at $2.62

Price caps on wholesale gasoline are expected to come down again next week, just as the state Public Utilities Commission is set to receive proposals from oil companies on how to adjust the price control mechanism.

The PUC is scheduled to publish next week's caps later today.

Preliminary calculations by the Star-Bulletin indicate a drop of about 18 cents. The decline comes after drops of 12 cents and 44 cents the previous two weeks.

The drops could bring the cost for regular gasoline below $3 a gallon on all islands.

If wholesalers charged up to the maximum allowed, the price for regular unleaded on Oahu is projected to cost about $2.62 a gallon after taxes, according to Star-Bulletin estimates. Prices would be about $2.73 on Kauai, $2.78 on most parts of Maui excluding Hana, $2.70 in Hilo and $2.72 in Kona.

Lanai would have the highest projected cost at $2.99 a gallon, while Molokai would be at $2.89 and Hana would be $2.86.

Estimates include an assumed dealer mark-up of 12 cents, although such charges vary from station to station and are not governed by the price cap.

Along Waialae Avenue on Oahu, prices yesterday ranged from $2.85 a gallon by Kahala Mall to $3.05 in Kaimuki and $2.92 near St. Louis. Closer to downtown, Lex Brodie's in Kakaako sold regular at $2.87 a gallon, while Costco Wholesale Club in Iwilei was at $2.84 this week.

Hawaii prices have steadily declined since reaching a record high of $3.68 a gallon for regular on Sept. 18.

Yesterday's statewide average of $3.11 was down a penny from the previous day, according to AAA's Fuel Gauge Report. The national average of $2.61 also was down one cent from the day before, the auto club said.

New price caps take effect on Monday, a day before the PUC's deadline for oil companies and the state Division of Consumer Advocacy to submit proposals for adjusting the formula that is used each week to set the price ceilings.

Specifically, the PUC is seeking proposals for creating different profit margins at various steps in the gasoline supply chain, a concern that has been raised by legislative Democrats who have criticized the PUC's implementation of the price cap law. The commission also is seeking proposals on how the price-cap law should address upcoming ethanol blending requirements for gasoline.

Meanwhile, the commission continues to analyze pricing data already submitted by oil companies, jobbers and others involved in Hawaii's gasoline industry.

The reports were required by the PUC to help it determine whether the companies were in compliance and to gather data to help the agency's continuing administration of the price cap law.

Lisa Kikuta, chief researcher at the PUC, said the information is being reviewed.

"We don't have an end date for when we expect to complete that review yet," she said. "Once we look at the data and are able to draw some conclusions from the data we are going to assess our next steps at that point."

Supporters of the price cap law say the information should give the PUC a better handle on how retailers, wholesalers and others are adapting to the legislation.

Oil companies have pledged compliance, and there is no indication that any are breaking the law. The legislation allows the PUC to request information to help in its continuing administration of the price cap law.

The Star-Bulletin's gas price calculations are based on prices listed by Bloomberg News Service, which vary slightly from benchmarks published by the Oil Price Information Service that the PUC uses in determining the price caps. Price cap calculations using Bloomberg data have varied from the PUC figures by as little as a fraction of a cent and by as much as 5 cents.