Yes, you read that correctly. When we finally thought that gas was getting cheaper, it goes back up starting January 1, 2007. So why this sudden increase? And why such a large increase as well? Blame the newly passed transit system.
Basically, Hawaii was using a state tax break for our gasolines since we were using ethanol blended gasoline. This allowed us to bring the gas prices down since we were using an alternative fuel. Now, the exemption from the tax break ends on December 31, 2006, which will bring our taxes back up for gas, ultimately increasing the cost of gas.
So why did I blame the transit system? In conjunction with an expired state tax break, our general excise tax is also increasing, from 4.166% to 4.712% starting in January. Why this hike? To pay for the transit system. This brings our total gas tax from 50.2 cents to 61.5 cents (source The Honolulu Advertiser). Starting January, Hawaii will have the highest tax on gasoline in the nation. As if that wasn’t enough, with the increase in the general excise tax, we have to pay more for everyday items as well. Great.
Let’s not blame the gas stations for the high prices though. They can’t do anything about it. They have to pay the taxes too, which forces their prices to be higher. Since we got hit with a double whammy, an expired tax break and the increase on the general excise tax due to the implementation of the transit system, gasoline prices are affected by the taxes.
Maybe it is time to get that sub-compact or hybrid vehicle. Prius anyone?
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December 22nd, 2006 at 8:45 pm
[...] Seems like everything is getting more expensive these days. Just like my previous report on the increase in gas prices, Hawaiian Electric Company is putting in a request to increase our electricity rates. Rates are reported to increase about 7%, and if it passes, the rates will increase this coming fall. [...]
January 3rd, 2007 at 1:26 pm
Seven percent? You should live in Illinois where we have as of January 1 an increase of 24 to 55 percent. Seven percent is pale in comparison……..
January 4th, 2007 at 11:54 am
Why not try the transit system? If it works for you, it will save gasoline and money.
sjl
January 5th, 2007 at 2:27 pm
24 to 55 percent increase is high, but consider how much gas is in Illinois compared to Hawaii. Your MOST expensive gas in Chicago is $2.79, with the cheapest being $2.23 (according to http://www.chicagogasprices.com). In Hawaii, the cheapest gas in Hawaii is $2.63…almost as much as the most expensive gas in Chicago. Don’t even ask how much the most expensive regular gas is here…a whopping $2.96 Despite a larger % increase in Illinois, we still are more expensive without the 7% increase.
January 5th, 2007 at 2:28 pm
Yes, the transit system might work, but it’s only benefits people who live on the west side of the island. Those who live on the east side still have to fight traffic no matter what. I live on the east side, so I can’t even ride the transit if I wanted to.
January 5th, 2007 at 3:36 pm
Why is this happenning? Is the world coming to an end here?….guys?
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