Gas Prices in Hawaii Refuse to Drop

Gas prices all over the nation are continuing to fall, but the prices in Hawaii refuse to drop. Motorists in Hawaii are paying as much or more as they have since this past May. The average gas price in Hawaii rose to $4.23 a gallon Tuesday, a full 75 cents more than the national average of $3.48 a gallon, according to the AAA Daily Fuel Gauge Report. So why do the gas prices in Hawaii refuse to drop?

It really doesn’t make much sense. Just three months ago the national difference in average was just over 0.30 cents, now it is pushing up towards a full dollar. Not only that, but Hawaii’s gas prices also considerably higher than even the two next closest states, Alaska and California, where motorists are paying an average of $3.97 and $3.88 a gallon, respectively. As of this article, the average gas price in Hawaii is $4.23 per gallon. Staggering.

Here is what Chevron is saying about the gas prices in Hawaii. Commenting on why they are not dropping.

Hawaii gas prices haven’t fallen along with mainland prices in part because the crude oil it imports from East Asia for use in Hawaii has been trading at a premium to other global crude markets. Prices were pushed up because of increased demand from Japan after the earthquake and tsunami in March, which shut down a major nuclear plant in the country, said Al Chee, Chevron’s spokesman in Hawaii.

Chevron is paying as much as $110 a barrel for some of its “Far Eastern” crude from Indonesia, Vietnam and Russia, Chee said.

“Crude costs clearly can have an impact,” Chee said. “The falling crude prices that are being widely reported aren’t true for crudes that Hawaii uses,” he said.

He also said varieties of crude oil used at both the Chevron refinery and one operated by Tesoro Corp. are limited because the facilities are not as sophisticated as other refineries the companies operate on the mainland. “We’re always shopping for the best price, but the types of crudes we can run in the refineries here are limited.”

While I understand the significance of high oil prices and what it takes to ship them here, this still doesn’t account for the fact that every year when Chevron, Tesoro, and other big oil companies release their operating reports, they seem to set new records every year for how much money they are making.

It just doesn’t fit. If you are netting over $2 billion a year, then surely there is room to drop costs, even in Hawaii. How long will gas prices stay high here? It seems like we report on this all the time, and gas prices remain high.