Average Gas Price in State Hits $2.75

As gasoline prices push ever higher nationwide, the Hawaiian city of Wailuku on Monday became the first U.S. town to see the average cost pass $3 for a gallon of self-serve regular gas.

Residents of Wailuku, located in central Maui not far from the island’s airport, were paying an average $3.019 a gallon, up from $2.999 on Sunday, according to AAA. For premium, the average price was $3.252 a gallon. Hawaii will launch wholesale gasoline price controls Sept. 1 -- the nation’s only such price cap.

“I’ve never paid so much,” said Brian Steffen, who owns a motorcycle rental business in Wailuku. “I’ve never been so blown away in my life.”

Still, Steffen knows the fuel bill for his motorcycle is a pittance compared with the costs hitting his friends in the construction business. “They’re going nuts just going back and forth to work every day,” Steffen said. “But what do you do?”

Asa Flowers in Wailuku is considering price increases to offset the added cost of filling up the florist’s three vans that make deliveries all over the island, said manager Lisa Kuzara.

“A lot of times, people don’t understand that it can be a $25 delivery [cost] for their $45 arrangement,” she said. “But we’re in a tourist industry, so we have to make it happen.”

Fuel prices are only slightly better on the mainland, according to the federal government’s latest weekly survey of retail fuel prices.

Excluding Hawaii, the priciest gasoline is in California, where a smattering of stations are already charging more than $3 a gallon.

The statewide average cost of self-serve regular was $2.75 a gallon Monday, up 3.4 cents from the previous Monday, according to a survey by the Energy Information Administration, an arm of the U.S. Energy Department.

It marked the third straight week that the statewide average had set a record, the energy agency’s figures show.

The nationwide average jumped 6.2 cents since the last survey to $2.612 for a gallon of regular, also a record high, the energy administration said. The government survey of retail prices doesn’t cover Hawaii.

Even at these record levels, however, gasoline is less costly than it was in the early 1980s after adjusting for inflation. By some measures, the price of gas would have to surpass the $3 mark to eclipse that inflation-adjusted peak.

“We’re within shouting distance” of that mark, said Paul Gonzales, a spokesman for the Automobile Club of Southern California.

“I think we’ll see higher prices until Labor Day,” Gonzales said. After that, prices should ease because vacations are over and kids are back in school -- and that means demand should be less robust.

For the most part, the cost of fuel is a reflection of soaring oil prices, which hit a record $66.86 a barrel Aug. 12 amid continuing worries that political unrest could curb production in some key oil-producing countries. On Monday, the cost of U.S. benchmark crude for September delivery ended the day up 10 cents to $65.45 a barrel on the New York Mercantile Exchange.

“We might bump around a little bit” on the oil markets, said Michael Armbruster, an energy analyst at Altavest Worldwide Trading Inc. “But it’s my belief that the [oil] market’s topping out around here.”

For motorists, there are a few hopeful signs.

On Monday, traders sent gasoline futures lower for the third time in four sessions, a sign that recent refinery troubles are considered less of a threat to nationwide fuel supplies, especially with just a few weeks remaining in the traditional summer driving season.

The price of regular gasoline for September delivery fell 2.19 cents Monday to $1.882 a gallon on Nymex.

In addition, the cost of diesel, which has stayed well above gasoline prices throughout the summer, is starting to ease -- at least in California. The statewide average retail price for diesel fell 0.5 cent in the last week to $3.037 a gallon Monday, according to the survey. Nationwide, diesel continued to increase, rising 2.1 cents to an average $2.588 a gallon.

Sen. Dianne Feinstein (D-Calif.) on Friday urged oil companies with operations in California to rein in the spiraling cost of gasoline. “I ask for your voluntary participation in keeping gas prices affordable in California,” Feinstein said in letters to executives of Valero Energy Corp., Shell Oil Co., Chevron Corp., Exxon Mobil Corp., Tesoro Corp., ConocoPhillips and BP.

Also last week, Senate Minority Leader Harry Reid (D-Nev.) and two other senators wrote President Bush, asking him to direct the Federal Trade Commission and other entities to investigate high gas prices. The federal government should exercise “vigorous oversight over the oil markets to protect the American people from price gouging and unfair practices at the gas pump and in the supply chain,” they wrote.

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Times staff writer Richard Simon contributed to this report.