Isle gas prices hover over $3

Fuel costs have fallen much further on the mainland

While gasoline prices nationwide have reached their lowest levels since mid-March, the average price of fuel in Hawaii continues to hover above $3 a gallon.

Even though gas prices on Oahu have crept below $3 in many parts of the island -- and as low as $2.68 at Costco -- the statewide average remains at $3.14, due largely to the higher cost for fuel on neighbor islands.

The statewide average has been above $3 since April 11. Oahu's average is the closest to going back below that mark, averaging $3.03 yesterday, according to AAA's Fuel Gauge Report.

Meanwhile, the national retail average is now $2.38 a gallon, and analysts believe pump prices could soon decline to within pennies of $2 a gallon.

Hawaii prices have come down from highs reached in mid-August, but only at a fraction of the rate on the mainland. This has lead to criticism of the oil companies and accusations of price gouging from consumer groups, which have called for the reinstatement of the defunct wholesale price cap law.

A revised price cap formula was passed by the Legislature this year but would be used to set price ceilings only if it were ordered by the governor.

Oil industry officials in Hawaii note that prices -- while still higher than the national average -- have, in fact, retreated and that the lag time is simply a result of market forces that cause Hawaii prices to more slowly match mainland trends.

Those officials also have cited higher costs for ethanol blending as contributing to higher gas costs and the limited capacity of the state's two refineries. Analysts have noted that the refineries, which are fairly old, can process only light, sweet crude oil, which is among the more expensive grades of crude because of its low sulfur content. Newer facilities have the capability to refine cheaper, higher-sulfur crudes.

Melissa Pavlicek, a representative for the Western States Petroleum Association in Hawaii, said, "There could be any number of influences that could be influencing those prices. The more important statistic to be looking at is the trend."

While the nationwide average has fallen by 50 cents in the past month, Hawaii's average has dropped about 24 cents.

The extended period of decline marks a departure from past trends. During previous short-term fluctuations of mainland prices, Hawaii's prices tended to remain flat during those times while also tracking well above the national average.

Consumer groups remain unconvinced.

"Two things are now obvious," George Fox of the group Advocates for Consumer Rights said in a recent news release calling for reinstatement of the gas caps. "The price cap would have saved consumers millions of dollars, and the oil companies have never departed from their historical pattern of gouging the people of Hawaii, even when global market forces indicate there is no justification for the high prices."

---