In Wailuku, the price of a gallon of unleaded regular gasoline edged just under the $4 mark Tuesday while Oahu drivers saw the price plummet to as low as $2.89 at the Costco Wholesale Corp. pumps.
Most areas of the state were reporting lower gas prices, with even Hana Gas in the remote East Maui community saying its price will be down by 10 cents when the pumps are turned on today. But the Hana price remains among the highest in the state at $4.89 a gallon, matching the price at Rawlins Chevron on Molokai where a station manager said she didn't expect a change in price until the next fuel barge docks in two weeks.
There was a touch of excitement in Wailuku though.
“Did you see? We’re below four,” exclaimed Momi Lilione at Uptown Chevron on Tuesday as the gasoline prices were lowered again. Uptown Chevron at the corner of Church and Main streets in Wailuku dropped its price for a gallon of regular unleaded to $3.999 Tuesday afternoon. Other Maui gas stations also are cutting fuel prices to motorists — but the outlying districts of Maui County still have the highest prices in the state.
The Maui News / AMANDA COWAN photo
"Did you see? We're below four," exclaimed Momi Lilione at Uptown Chevron Tuesday as the gasoline prices were lowered again, and a gallon of regular was set at $3.999.
Other stations around Central Maui also cracked the $4 barrier. Aloha and Ilima Shell stations in Kahului matched the $3.999 price. Owner Paul Hanada said the prices he pays his supplier have been coming down "about a dime a week."
Alvin Makimoto, owner of Uptown Chevron, said he couldn't predict when or how much more prices might drop. Distributors never signal their intentions in advance, he said.
"Oh, no. You just get your e-mail" alerting the retailer to the cost of his next delivery. "We're happy," said Makimoto.
On Lanai, the scenario is less happy, with the price of gas timed to the next barge arrival. At Lanai City Service, the price remained $5.57 for a gallon of regular and a worker said she didn't know when the next fuel barge will be in.
The state as a whole still averaged the second-most expensive gas in the country at $3.79 per gallon, according to AAA's Fuel Gauge Report.
Costco on Oahu is able to cut fuel prices faster because its stores buy gas at current prices, while other stations may buy and sell gas at prices that are a week old, said Richard Galanti, Costco's chief financial officer.
''When the underlying cost of oil is going down in price, we turn our inventory dramatically faster than the average station in America,'' Galanti said.
Even so, Costco's membership-driven business model alone doesn't explain how it can undercut the competition so severely, especially when all the motor fuel in the state comes from two refineries.
In the same neighborhood where the Honolulu Costco was selling gas for $2.89 on Tuesday, a nearby Aloha Petroleum station was charging $3.66 per gallon of unleaded.
Hawaii gas prices tend to fall slower than they rise, said Bank of Hawaii chief economist Paul Brewbaker.
''Research has tended to support the hypothesis that retail gas prices in Hawaii tend to be sticky on the way down and more flexible on the way up,'' Brewbaker said.
A gallon of unleaded gas cost an average of $2.89 nationally Tuesday, according to AAA. Alaska had the most expensive gas at an average $3.84 per gallon.
Oil prices fell below $71 a barrel Tuesday compared to $79 per barrel a week earlier. Oil cost more than $100 a barrel Sept. 30.