Gas in Kona almost same as Hilo

[Nalu]

Went to Kona for the weekend, filled up in Hilo for 4.45, got over to Kona and it was 4.51. It used to be like 30 or more cents a gallon difference. I find this a little odd, either they're way cheaper than normal or we're over priced. Gas at Costco was 4.29.

[rbakker]

No doubt it's been asked before, but could someone explain to me why gas is 50c per gallon more expensive here than on the mainland? (average price there is 3.79) It doesn't cost 50c (or even 10c) a gallon to ship gas from the mainland to here, surely.

[macuu222]

I'm not sure why...but I do know we are fast approaching the most expensive gasoline price ever here once we hit $4.50 a gallon. Last time that happened the Hawaiian economy went into a tailspin.

[JerryCarr]

quote:

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Originally posted by rbakker

No doubt it's been asked before, but could someone explain to me why gas is 50c per gallon more expensive here than on the mainland? (average price there is 3.79) It doesn't cost 50c (or even 10c) a gallon to ship gas from the mainland to here, surely.

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I've heard a lot of reasons for the differential, and the two most common are:

1. Taxes on gasoline in Hawaii are higher than in almost any other state. According to a AAA survey in January of this year, only California and New York taxed gas more heavily than here.

2. High refining costs in a captive market. While it is true that the cost of doing business in Hawaii is higher than most places, some people doubt the refiners' claims that cost of refining crude here has to be as high as they say. I honestly don't know, not being a petroleum economist.

[EightFingers]

Economy of scale: Smaller quantities of crude shipped farther would be my guess. Hawaii is not exactly the top market for crude oil.

[bystander]

Then how do you explain the price differences within the state? Maui usually has much higher prices. Oahu always has lower prices. The price in Keaau is usually a little lower than in Hilo which is also lower than in Kona. It seems like the gas retailers are charging what they think people are willing to pay in certain areas.

[PaulW]

According to http://www.tfhawaii.org/taxes/fuel.html each county has different gas taxes:
HONOLULU 16.5¢
MAUI 16.0¢
HAWAII 8.8¢
KAUAI 13.0¢
(on top of the state tax of 17c)

[Orchidlandguy]

Why higher in Kona than Hilo? Any ideas since tax is the same?

[Rob Tucker]

Because any excuse will do.

[PaulW]

Where does the gas arrive? Maybe it has to be trucked over to there from Hilo.