Hilo Gas Prices hit a new high of $4.70 per gallon this week. But cheer up. It could be worse. Our neighbors on Molokai and Lanai are now paying more than $5 per gallon. I guess it is time to take my horse out of the barn and leave my car in the garage. Oh wait. I don’t own a horse.
According to the folks at HawaiiReporter Oahu dealers only make $0.10 to $0.12 per gallon and their profits actually go down as gas prices go up:
Bill Green, an energy consultant and the former owner of Kahala Shell in East Oahu, said Oahu dealers make about 10 cents to 12 cents per gallon, and as the prices go up, their profits actually decrease. That is in part because credit card fees rise percentage wise as sales do. In addition, it takes more cash to fill the underground gasoline tanks, with many dealers having to take out loans to fill their tanks.
I found this to be very interesting and very counter-intuitive. But I guess it makes sense. So when do I think gas prices go down? Probably when we discover oil in Hawaii. Barring that I suspect that it would take a massive economic downturn to put a dent in rising gas prices, so I’m a little afraid to wish for lower prices. Or if we all went Amish and stopped using cars, maybe that might have an impact.