LIHU‘E — It’s hard not to notice gasoline prices creeping skyward.
The average price for a gallon of regular gasoline on Kaua‘i sits at about $3.36, an increase of nearly 40 cents from the beginning of June.
Early last week, state lawmakers decided to not extend a general excise tax exemption for ethanol-blended fuels, officials said, which is what caused a recent surge in prices.
Average prices on the island shot up from $3.13 per gallon at the end of June to $3.39 on July 1, when the tax took effect.
The state Tax Department will reportedly collect an additional $40 million for the state treasury due to the sunsetting of the ethanol exemption.
Gov. Linda Lingle said at Thursday’s Kaua‘i‘ Chamber of Commerce luncheon that prices went up “substantially” because of the higher taxes and added that she wanted to “resist any more effort to increase taxes,” in reference to House Bill 1271, which would potentially increase tax on a barrel of oil from 5 cents to $1.05.
Lingle asked why legislators would pass a bill that “would take another $31 million out of the economy every year and turn it over to the government, at a time when the private sector is struggling?”
If prices of gasoline continue to rise, businesses on the island will be affected, she said.
“The rising cost of fuel is a key concern for the business community,” Lingle said, adding that her decision to give notice of intent to veto HB 1271 was largely due to this fact.
“The government doesn’t create jobs, only the private sector creates jobs,” she explained, regarding why additional taxes would be a burden to those paying at the pump. “We need to leave that money in the economy for you to do what you do best.”
The average gas price increased by 10 cents since last Thursday, according to AAA Hawai‘i.
“We saw a similar jump in prices last week due to the reinstatement of the state sales tax on gasoline,” said AAA Hawai‘i Regional Manager Richard Velazquez in a press release. “It’s difficult to say how much of this week’s increase is due to the same reason. Gas prices around most of the nation have been going down in recent days.”
