Barrel tax increase would raise Hawaii gas prices - Hawaii News Now - KGMB and KHNL

Barrel tax increase would raise Hawaii gas prices

Robert Harris Robert Harris
Bill Green Bill Green

By Jim Mendoza - bio | email 

HONOLULU (HawaiiNewsNow) - Hawaii's high gas prices will go higher if a dollar increase in the barrel tax becomes law.

Supporters like Sierra Club - Hawaii Chapter director Robert Harris said a jump at the pump will be minimal.

"It's about a penny or two per gallon of gas," he said.

But others in the gasoline industry say it will be a significant spike.

"My minimum estimate would be five, six cents. But I think it could be eight, nine, ten cents," said Bill Green, consultant with Kahala Shell.

Lawmakers passed the bill Wednesday to help plug a budget deficit and move Hawaii toward energy self-sufficiency.

The tax increase on petroleum products from 5 cents to $1.05 would bring in $22 million a year, with $13.2 million going to the general fund and $8.8 million to food and energy security programs.

"The benefits that it would achieve is by funding projects like making sure solar is available, funding energy efficiency projects. The idea is it's supposed to be moving our economy off that direct link to fossil fuels.

Refineries would pay the tax then pass it on to clients.

They will pass it on to consumers in gas price increases and higher electricity bills.

Gov. Linda Lingle has said she likely will veto the measure.

"When you raise the price of a barrel of oil, you raise the price on every business in the state and every family," she said.

"It's an unnecessary tax on the driving public at a time when we should be figuring out ways to lower costs, not increase costs," Green said.

If lawmakers override the governor's veto the barrel tax increase becomes effective on the first of July.

Copyright 2010 Hawaii News Now. All rights reserved

Powered by Frankly