Think paying $3.36 for a gallon of gas is expensive?
In the words of Bach-man-Turner Overdrive, “you ain’t seen nothing yet.”
Gas prices could edge ever closer to $4 at the pump next week, as members of the state Public Utilities Commission (PUC) raised their gas cap on a wholesale gallon of regular unleaded gasoline by 45 cents.
Over the past two weeks, or since the state gas-cap law went into effect last Thursday, Sept. 1, the pre-tax cap price has gone up 72 cents.
The weekly maximum pre-tax wholesale price of gasoline for the period of Monday, Sept. 12, to Sunday, Sept. 18, for Kaua’i, was set at $3.01.
This latest hike comes one week after the maximum price for wholesale gas soared 27 cents compared to the week before.
Take that base price of $3.01, then add about 61 cents in taxes, and the total is $3.62. Add the dealer mark-up at the pump, which on Kaua’i can be anywhere from 18 to 30 cents, and $4 is not far off.
“In the 10 years I’ve been in business, prior to the gas-cap law, I’d never seen an increase of more than 10 cents in a month,” said Jeff Guest, owner of the Princeville Service station.
Guest gets his gasoline from Senter Petroleum Inc. officials, who are “jobbers,” or delivery middlemen who purchase their fuel from Chevron.
Roger Cable, general manager of Senter Petroleum Inc., said he was waiting to see what Chevron leaders would be charging him following announcement of the new PUC rates.
“I won’t have anything to comment on until I see what our supplier is going to do. If they keep our current margins, we will still be able to deliver. If they don’t, we will not. It is a day-to-day thing,” he said.
Cable said the markup at the pump on O’ahu, where the maximum pre-tax price for Sept. 12 to Sept. 18 was set at $2.87, was about 12 cents.
He said that, by necessity, the markup is higher on the outer islands.
He said if a station owner pumps 60,000 gallons at 20 cents a gallon profit, that is only $12,000 per month, to pay rent ($3,000 or more), electricity, insurance and employees seven days a week 16 hours a day.
“There’s not much left there to feed a family,” he said.
Spot prices, used for the base-price calculation, went up to $2.59, compared to $2.14 last week and $1.87 in the previous week.
For the week of Monday, Sept. 12, O’ahu’s wholesale pre-tax cap starts at $2.87, midgrade at $2.92, and premium at $2.96. For Kaua’i, regular is $3.01; midgrade is $3.06; and premium is $3.10. For Maui, excluding Hana, regular is $3.01; midgrade, $3.06; and premium $3.10.
The baseline price established by members of the state Legislature under the wholesale-price-cap law and used by PUC members, is the weekly average of the daily spot price for Los Angeles, the U.S. Gulf Coast, and New York.
The Gulf Coast has been ravaged by Hurricane Katrina, while operators of gas stations in New York City had been flirting with $4 per gallon of unleaded regular gasoline earlier this week.
The weekly cap established by PUC members sets the maximum amount officials at the oil companies can charge for wholesale gasoline.
Although the law provides Gov. Linda Lingle with the authority to suspend the gas-cap law in part or in whole if it is determined to cause significant adverse impacts to the economy or public health and safety, she emphasized she will not exercise the emergency power based solely on a rise in the wholesale price cap.
- Andy Gross, business editor, may be reached at 245-3681 (ext. 251) or email@example.com