The average price for a gallon of regular gasoline in the United States is $2.07, down from $3.30 a year ago. The state with the lowest gas price is Missouri at $1.76, according to GasBuddy. The price for a gallon in Hawaii is nearly twice that at $3.34. The island state has nearly every major disadvantage when it comes to forces that drive gas prices lower.

The playing field is even among all states when it comes to the number one factor in gas prices. The price of oil has dropped to under $50 from over $100 in June. The combinations of an OPEC decision to keep production at current levels, along with the yield from fracking in the United States, have driven prices down. Add to that the likelihood that GDP growth worldwide is expected to be very modest near term. The most recent evidence is the World Bank’s decision to revise 2015 and 2016 GDP estimates downward compared to its expectations set in June 2014.

State gasoline taxes are the next major factor in the overall price of gas. According to the American Petroleum Institute, the total gas taxes in Hawaii add up to $0.634 per gallon, when federal excise taxes are included. That makes the Hawaii figure the fourth highest among all states. In contrast, the state with the lowest tax levels is Alaska. Its excise tax total is $0.297 per gallon.

Much of Hawaii’s gas price problem has to do with transportation costs, which are large because of the state’s isolation. According to the U.S. Energy Information Administration:

Hawaii produces no petroleum and has no proved petroleum reserves. The state has two refineries, located in the Honolulu port area. Both can produce a broad range of refined products and have been meeting almost all of Hawaii’s demand. One refinery was scheduled to be shut down in 2013 and turned into a terminal facility, but a new owner decided to maintain refining operations. Refinery feedstock is most often light sweet crude oil imported from Pacific Rim producers, although crude oil is also imported from Africa, Russia, South America, and the Middle East. Alaska used to be a major crude oil supplier to Hawaii, but its production has declined. Refined products, primarily jet fuel and propane, are also imported from Asia, Canada, and the Caribbean.

Based on all these factors, Hawaii has a gas price problem today, and one that will not go away in the future.

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