Published: March 14, 2008 11:31 pm      

Trouble in paradise: Maui may become first U.S. area with $4 average gas price

WAILUKU, Hawaii — “Maui No Kai Oi” is a popular Hawaiian saying that means Maui is the best. Mike Sweeney recently moved to this idyllic island from Denver and was hit with the other side of living in paradise with his first visit to the gas pump: Maui is also No. 1 in gas prices.

“After seeing the total, I won’t be smiling,” Sweeney said as he watched the numbers on the Chevron pump spin faster than a slot machine.

The pump finally stopped at $97.20, which put 24.5 gallons in his Chevrolet Avalanche.

He was elated about living on Maui and being reunited with his black, super-size pickup truck, which just arrived from Colorado, but he wasn’t so thrilled about paying nearly $4 for a gallon of regular.

While the price of oil climbs above $110 a barrel, most Americans dread the day they will have to pay $4. On this tropical island and a few stations in California, $4 gas has already arrived, straining the pocketbooks of residents and businesses.

Maui is on the verge of becoming first area in the nation to average $4 for a gallon of regular. The average price in Wailuku reached $3.934 on Thursday, the highest price in AAA’s Daily Fuel Gauge Report. At several stations, it was a penny shy of $4. In the remote coastal town of Hana, it was around $4.40 a gallon.

“Outrageous. Completely outrageous,” said Janet Carone, of Wailuku.

The high price to get around has hurt many families, like the Carones. They’re coping by driving less, carpooling or working more.

“It has a big effect because our housing is high, our food is high, and the gas prices just make it worse,” she said.

Other than AAA, perhaps no one on Maui tracks local gas prices better than Deok Lee, owner of Airport Taxi. He maintains a detailed record of gas expenses using Excel spreadsheets on his laptop.

In just nine days, Lee had spent $300 to fuel his Toyota Sienna van. Like his drivers, the more Lee pays for gas, the less money he brings home. His pay shrinks by the day — and by the gallon.

Fuel cost has more than tripled since he took over the business in 1999, and it’s forcing him to consider trading his van, which costs $80 to fill, for a smaller four-cylinder car.

“Unfortunately, it’s going to take away some comfort for the customers. But you gotta do what you gotta do,” he said.

Lee expects many cabbies will be forced out of business if fuel prices keep rising.

Chuck Gamarata, who operates the only limousine taxi on the island, is forced to work longer hours to compensate for the gas prices. He’s still taking home about $10 less each day.

Other businesses are also feeling pinched.

Todd Winn, co-owner of North Shore Explorers, has been hit hard since launching the tour company in September. It takes 150 gallons of diesel, at $4.20 a gallon, to fill up his 30-foot rigid hull inflatable boat, which gets about a mile per gallon. It also costs more than $100 to fill up the Ford F-350 to tow it.

While the new company is trying to build up clientele, it may be forced to raise rates or add a fuel surcharge.

“It’s been dramatic enough that we’ve actually seen our original business model blown out the window,” Winn said. “It’s been quite costly and we’ve had to cut costs in other areas to make it work.”

He shakes his head when hearing about people in other states complaining about gas prices. Maui residents remember the good ol’ days of $3 gas.

“It’s just the price of living here,” Winn said. “I’m not sure it’s fair. But at the same time, it’s not going to get me to move back to the mainland to pay a buck less for a gallon of gasoline.”

Hawaii is the most oil-dependent state in the nation, with more than 90 percent of its energy coming from imported oil. The state’s economy is also extremely sensitive to oil prices globally because it depends on airplanes and ships to bring in tourists and all of its goods.

Marie Montgomery, spokeswoman for AAA Hawaii, said it’s a little comfort for islanders that gas prices haven’t risen as fast as in other states, such as California.

On Thursday, California hit another record with an average of $3.609, overtaking Hawaii ($3.587) for the nation’s highest gas prices. Meanwhile, the national average has risen to a record $3.267, according to the auto club.

But Maui, which doesn’t have a major public transportation system, now has all the California cities beat by at least a quarter a gallon.

Residents here have long wondered why gas prices on the island are so much higher than on neighboring Oahu, where Honolulu gas is about 50 cents less.

Hawaii, which imports most of its crude oil from Alaska and Indonesia, has two refineries on Oahu operated by Chevron Corp. and Tesoro Hawaii Corp.

Both companies blame the Maui price on higher transportation costs, even though islands further away, such as the Big Island, have lower prices. They also cite several other factors, such as volume, competition and higher local taxes on Maui.

Chevron spokesman Albert Chee said the price, in most cases, is set by the station operators and owners. The company sets the retail prices for only six stations it owns out of the 63 Chevron-branded outlets in Hawaii.

The company wouldn’t disclose the difference in wholesale price between Maui and Oahu. However, Chee said: “It’s not 50 cents. It’s not even half.”

“The difference between Oahu and Maui of 50 cents is not flowing into my pocket,” he said.

Chevron noted that the cost of crude oil has spiked 20 percent in the past 30 days, while gasoline has increased 9 percent nationwide and only 5 percent in Hawaii.

Not everyone seemed upset with the pump prices on Maui. Tourists, who pay an average close to $300 a night for a hotel room, don’t seem to mind.

“If the gas would’ve been higher, we still would’ve gone,” said Jack Glisson, of Jacksonville, Ill. “It didn’t make any difference.”