Gas prices soar for second week

For the second time in as many Mondays, gas prices will increase significantly. On the heels of last week’s 14-cent jump, the state Legislature announced that gas prices will rise another 13 cents for the week starting Monday, April 17.

As usual, Hawaiians will feel the pinch more than most.

In Lihu‘e, regular unleaded should go from around $3.28 a gallon to $3.41 per gallon. O‘ahu, home to the major port of entry for the Hawaiian islands and, as such, the lowest zone adjustment price, should see retail prices around $3.23 per gallon.

Hawai‘i gas prices are based on the five-day wholesale average of regular unleaded in three markets: New York Harbor, the Gulf Coast and Los Angeles. For the five days of April 5, 6, 7, 10 and 11, the baseline price average was $2.1566 per gallon, up 12.57 cents from last week’s $2.0309 per gallon. In the last two weeks, the baseline price average has risen 26.37 cents, resulting in a 27-cent hike at the pump.

The wholesale price cap includes the baseline plus various adjustments based on location, zone price and marketing margin (see table).

Molokai and Lana‘i have the highest zone price adjustments. Molokai could see prices up-wards of $3.60 a gallon next week.

While gas station attendants and managers do not foresee a major shift in consumer behavior, experts, academics and pundits argue over whether the world is approaching “peak oil,” where demand exceeds production capacity.

“We’re not going to go much farther in terms of what (oil) we can produce on a yearly basis, despite demand,” said Bill Cowern, whose company, Hawaiian Mahogany, recently won a contract from the Kaua‘i Island Utility Cooperative to help convert biomass into electricity. “That’s going to drive up prices dramatically.”

The price of oil has hovered just below $70 per barrel recently, a three-fold increase from the $23-per-barrel prices of early 2002.

“People think it’s bad now,” Cowern said. “We’re looking at the bottom right now. It’s only going to get worse.”

While increases always take effect on Monday, most Lihu‘e-area and eastern shore stations did not change their prices last week until midday Tuesday.

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