Hawaii:Higher gas prices hurt away from pumps, too

By Andrew Gomes Advertiser Staff Writer

Annette Kahalewai drives a lot slower these days, easing on and off the gas pedal. The Mililani resident also leaves for work earlier to miss heavier stop-and-go traffic, stops gradually when possible, and avoids unnecessary lane changes in her four-cylinder 1999 Malibu  all to ease the burden of rising gasoline prices.

You dont think about it until you fill up, said Kahalewai, who drives 45 miles roundtrip to work in Honolulu. It made a dent in my head. I said, OK, maybe I shouldnt accelerate so fast. 

The climbing prices at the pumps are paining everyone from daily commuters and Dominos Pizza delivery drivers, to small businesses faced with higher shipping costs and large transportation companies. And all of it could have an impact on Hawaiis economy, still trying to recover from years of sluggishness.

Nationwide, gasoline prices are hitting historic highs  more than $2 a gallon in many cities across the Mainland. Average gas prices in the state hit $1.75 a gallon for self-service regular unleaded Tuesday  20 cents higher than the same time last year and higher than the nationwide average of $1.54 a gallon, according to the American Automobile Association.

Pearl Imada Iboshi, the states chief economist, said the higher gas prices are the result of higher prices for imported oil, which means more money is flowing out of the states economy.

It likely wont improve soon. Kahalewai paid $1.60 a gallon last week to fill up  a relative bargain today  and the surge in gas prices is expected to continue into the summer. Prices could remain volatile despite measures aimed at relief, including a possible repeal of the federal gas tax and potential production increases by the Organization of Petroleum Exporting Countries, which will discuss the issue later this month.

For drivers in Hawaii, gas prices vary across neighborhoods on all of the Islands, but some of the most expensive may be on Lanai. Last Wednesday, drivers on Lanai were paying $2.20 for regular unleaded, and $2.35 for supreme, at the islands only public gas station, Lanai City Service.

On Oahu, Mike Ishii, owner of Hawaii Kai and Aina Haina 76 stations, raised prices 5 cents Tuesday after supplier Tosco increased wholesale prices to dealer stations by the same amount. This is unbelievable, Ishii said. Since Jan. 26, wholesale prices for 76 dealers have risen 27 cents. And although Ishii forced himself to lower prices 4 cents Friday to stay competitive, ahead of a 2-cent wholesale reduction by Tosco, he said he doesnt know when the increases will stop. The oil squeeze that has led to the higher gas prices also has triggered higher prices for everything from airline transportation, ocean shipping, trucking and electricity.

Some businesses, such as Dominos Pizza, are feeling the squeeze from all sides. The 22-restaurant chain in Hawaii ships supplies from the Mainland and interisland to four Neighbor Island stores. It occasionally flies in goods. Trucking companies deliver orders to the Dominos stores, which use a lot of electricity. And the pizza delivery drivers, who get paid by the run and must pay for their own gas, also suffer.

Business is always tough, especially in the fast-food business where margins are really small, said Russell Kagawa, operations director for Higa Industries Hawaii, owner of the Dominos Hawaii franchise. Every little bit hurts.

Dozens of other businesses across Hawaii are also feeling the pinch:

Airlines. Major air carriers, including Hawaiian Airlines, have raised roundtrip Hawaii-Mainland fares by $40 to cover higher fuel costs. Aloha Airlines, which began Mainland service last month, is considering such a move.

Trucking firms. Local trucking company Island Movers Inc. burns as much as 10,000 gallons of fuel a month. Higher fuel costs havent prompted the company to raise prices yet, but if things continue then definitely the (regulated) trucking industry probably would have to try to get an increase, said Donn Takaki, Island Movers vice president.

Tour companies. Roberts Hawaii Tours, which operates a statewide fleet of more than 1,000 vehicles, imposed a $1-per-tour charge the last time there was a big jump in gas prices. So far this time, Hawaiis largest tour company has absorbed substantially higher fuel costs from its contracted supplier, and will continue to monitor the situation. Right now its day to day, said company spokeswoman Sam Shenkus.

City transportation. While higher gas prices have not driven a noticeable number of people out of their cars and onto public transportation, TheBus uses 16,000 gallons of diesel fuel every day, said Bill Haig, customer services manager. Diesel prices last week averaged $1.92 a gallon, up from $1.84 during March 1999 and 1998. Every penny increase costs city government $160 extra a day in bus fuel. So far this year the fuel supplier for TheBus has raised prices 3 cents.

Shipping companies. Matson Navigation Co. and CSX Lines Inc., formerly Sea-Land Services Inc., have raised fuel surcharges. Matson implemented a 2.25 percent surcharge Feb. 20, and is expected to file for another adjustment. CSX recently filed to boost its 2.25 percent surcharge to 3.25 percent effective March 26.

Small businesses. Carolyn Zehner, owner of pet-sitting business Critter Sitters Hawaii, plans to add a fuel surcharge for customer jobs outside a 10-mile radius from her home in Aiea, effective July 1. She said rising gas prices led to her decision.

It was just like, whoa! I cant afford this too long, she said. Its not a huge island, but miles add up.

Still, the higher gas prices havent fazed some consumers.

Dave Chun, president of Honolulu Ford where people buy more trucks than cars, said so far gas prices do not appear to have started to influence consumers car-buying decisions.

Gas station owner Ishii said he hasnt yet seen people switching to less-expensive, lower grades of gas in an effort to save money.

Robert Kessner said he didnt mind putting $1.79-a-gallon premium, unleaded gas into his 1973 BMW last week at the Queen Street Lex Brodies when the pumps for regular unleaded gasoline were temporarily out of service.

What are you going to do? asked the retired University of Hawaii professor who usually fills his tank with regular, unleaded gasoline. In a lifetime, what the hell is it going to cost?

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-- Carl Jenkins (Somewherepress@aol.com), March 19, 2000