March 17, 2008
In a reversal of the usual gasoline price pattern, the isolated market of Hawaii now has cheaper gasoline than California, said the Foundation for Taxpayer and Consumer Rights.
In addition, Hawaiis Legislature is proposing to require that oil refiners open their books on their costs and profits, a move that FTCR has long advocated in California and nationally.
While Hawaii dropped a little to $3.62 a gallon today for regular, California hit another daily record at $3.634, per AAA. In addition, because of its hot fuel law, Hawaii compensates for its high gasoline temperatures by selling a slightly larger gallon at the pump. The total difference is more than a nickel a gallon, said FTCR.
When Hawaiis gasoline price drops below Californias, its a signal that prices are separating from reality in the U.S. West, said Judy Dugan, research director of FTCR and its OilWatchdog project. Crude oil prices have started dropping and the national average gasoline price eased a fraction of a cent on AAA today, but theres no signal yet that Western gasoline prices will follow.
Even in Washington State, which uses plain regular gasoline instead of a clean-air formula, and also has lower gasoline taxes, the price per gallon is a record $3.528, noted FTCR.
Hawaii legislators are at least taking action to control the usual spring runup in gasoline prices and refinery profits, said FTCR. The Hawaii legislation (SB 2630) has passed the state Senate and is being considered in the House, reports the Honolulu TV station KHON.
The bill would require nearly every segment of the states refining industry to disclose the cost of doing business in Hawaii. Oil and gas companies would be required to file a report every six months on such items as the cost of crude oil, refinery operating expenses, marketing operating expenses, and corporate overhead.
The oil industry is lobbying furiously against Hawaiis proposal, but its nothing more than a little sunshine on the dark hole of gasoline pricing, said Dugan. California lawmakers caved in to oil industry pressure last year and failed last year to pass a much milder version of a disclosure bill. They owe it to Californias stressed-out motorists to do it this year.
Hawaiis retail gallon of gasoline is larger than in the rest of the U.S. because of the states hot fuel law. Hawaii is warm year-round, and so is gasoline sold in the state, averaging over 80 degrees. Gasoline expands and loses energy as it heats up. Hawaii requires a gallon slightly more than 1% larger than the U.S. standard, a hypothetical 60-degree gallon.
In reality, Hawaiis gasoline is more than a nickel cheaper than Californias, because drivers are already getting four cents extra worth of gasoline in each gallon, said Dugan. No wonder oil companies and marketers are so opposed to giving motorists in California and other warm states a fair measure of fuel by compensating for fuel temperature on retail sales.
