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Experts: Dipping into nation’s petroleum reserve will offer relief, but not for several weeks

Economists say dipping into the nation’s petroleum reserve ― as President Biden has ordered ― could lower gas prices in Hawaii by up to 30 cents a gallon.
Published: Mar. 31, 2022 at 3:31 PM HST|Updated: Mar. 31, 2022 at 4:14 PM HST
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HONOLULU (HawaiiNewsNow) - Economists say dipping into the nation’s petroleum reserve ― as President Biden has ordered ― could lower gas prices in Hawaii by up to 30 cents a gallon.

But it probably will take several weeks to notice a difference at the pump.

On Thursday, the average price for a gallon of regular unleaded in the islands was $5.19.

Meanwhile, University of Hawaii Economic Research Organization Executive Director Carl Bonham warns any price drop might not last long.

“If there were a total disruption of Russian oil exports which there really hasn’t been yet, prices could go right back up,” he said.

He said the reason is limited reserves due to oil production being shut down during the pandemic.

“Now the economy has come roaring back and we still don’t have all of that production back,” said Bonham. “Then you add on to that potentially losing as much as 13% of global production because of Russia. And we don’t know when that ends.”

In an attempt to provide relief to residents, a councilmember on Hawaii Island is proposing a resolution that would cut the county’s 23-cent gas tax by almost half.

“My desire is to decrease it by 10 cents a gallon. That accounts for all liquid fuel,” said Councilmember Matt Kanealii-Kleinfelder.

He says he believes government has the funding in place to support the idea.

“Reality is we have high property taxes this year,” Kanealii-Kleinfelder said.

“There’s a lot of different revenue sources coming in from the federal and state level and our residents need the break. We can do this.”

Bonham added it will likely be end of summer before US oil production rebounds to pre-pandemic levels. “There’s labor shortages and there’s truck shortages,” he said.

“It just takes time. It’s a lot easier to shut down production than it is to ramp it up.”

The idea to cut Hawaii Island’s gas tax will be up for discussion during a council meeting April 5.

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