Hilo gas prices continue to fall

[Bob Orts]

quote:

---

Originally posted by Jon

And yes Texas has oil fields... but the Gasoline has to be shipped around just like everywhere else. I find it hard to believe that it costs a $1.00 a gallon to ship it here. My guess the state is in bed with the current provider and I bet the county wont let anyone build a new storage tank/distributor facility. That way someone makes a killing on the all of it.

---

Like the mainland, Hawaii refines crude into end user products. But unlike the mainland, Hawaii doesn’t have inter island pipelines or excess supply distribution markets. All refined products must be actually shipped by truck and ships for local consumption or sale. Crude refined in the midwest isn't trucked from Texas oil fields, or east cost tanker unloading points, it's piped to the refineries through a distribution pipeline network. The cost is cheap via pipelines. Even refined gasoline isn't loaded in tankers and driven from one part of the country to another, it's piped.

You can not compare Hawaii's refinery process to the mainland. Since all refining is done right here for use here, the full cost of the entire process is shouldered by the local consumers. If production starts to exceed demand, they slow or shut down, with that cost reflected in the price. On the mainland, they broker the excess to other distributors who have demand keeping the cost lower. Likewise, if demand starts to exceed supply, they can't just call Kinder Morgan who opens some valves and thousands of gallons an hour of gasoline starts flowing into the local tank farm.

People, you are on an island in the middle of an ocean, what part of higher cost don't you understand?