Molokai hits hard with rising fuel costs

By Catherine Cluett Pactol

As drivers marvel at the recent spike in gasoline prices, rising fuel prices around the world will soon further increase the cost of living for Molokai residents, and authorities are urging consumers to find ways to save. Hawaiian Electric just warned of a 25% increase in electric bills coming for Molokai customers due to soaring fuel prices, and changes in the global oil market will affect everything from costs groceries to airfares to monthly utility charges.

Last week at gas pumps, residents saw an overnight jump from $5.63 to $5.78, after recent weeks of frequent increases. Officials say this is due to a combination of recent inflation and an ongoing ban on US crude oil purchases from Russia following Russia’s invasion of Ukraine.

“The price of fuel is going up around the world because the cost of crude oil is going up,” Marc Inouye, director of government and public affairs for Par Hawaii, a major state fuel marketer and gasoline supplier, said Saturday. of Molokai. . “Just in the past five months, the cost of crude, the main ingredient in refined products, has increased by about 20% and recently hit $130 a barrel. It now hovers at $110 a barrel.

Par Hawaii operates the state’s only refinery in Kapolei, Oahu.

“In Hawaii, we produce all of the petroleum products on Oahu and then they are transported by barge to neighboring islands, including Molokai,” Inouye continued. “Shipping rates to nearby islands are also a factor in the price of fuel. It’s too early to tell what impact crude oil prices will have on shipping rates over the next few months, but we We’ll keep you posted on any updates as we learn more.

Prior to President Biden’s executive order prohibiting the purchase of Russian crude oil, Par Pacific made the decision to suspend the purchase of crude oil from Russia, Inouye added.

“We source crude oil from other places, mostly in North and South America,” he said.

Hawaiian Electric includes the fuel cost surcharge in its pricing formula, regulated by the Public Utilities Commission, to account for fluctuating fuel prices in the global market.

“Hawaiian Electric makes no profit on the fuel used to generate electricity. As part of a regulatory fuel cost risk-sharing mechanism, the company’s shareholders are required to pay a portion of the cost when oil prices rise too much, resulting in a slightly lower rate for customers.” , the utility said in a news release last week.

But with the economic sanctions on Russia, Hawaiian Electric expects residential bills for Oahu customers to rise about 10% over the next few months, with Maui County increases estimated at 20%.

“The increases we are anticipating are more brutal than we have seen before and, in addition to the inflation that we have all experienced in recent months, I know that they will have an impact on the budget of many households,” said said Joe Viola, Hawaiian Electric. Senior Vice President of Client, Legal and Regulatory Affairs.

However, Mahina Martin, director of government and community affairs for Hawaiian Electric, said the impact will be even greater for Molokai customers.

“…Because Molokai’s population is relatively smaller than the other islands, we expect an increase of about 25% or $45 over several months,” she said. “We know that’s a lot and that the cost of living is already extraordinarily high for the people of Molokai. Having a higher electricity bill will make things even more difficult for those who are already struggling. That’s why we’re notifying everyone about these increases now, before they happen, so residents and businesses can take steps to reduce usage and prepare. This can make a difference as we move forward with events unfolding in Ukraine over the next few months. Although forecasts predict a slight reduction this summer, this will depend on the international situation.

She suggested simple measures such as unplugging electronics when not in use, using less hot water and getting rid of that old second fridge that uses a lot of electricity can help lower residents’ bills.

Molokai resident Matt Yamashita has long been involved in renewable energy in Molokai and is one of the founding members of Sust’ainable Molokai’s Molokai Clean Energy Hui, which facilitates the Community Action Plan effort for the Energy Resilience (CERAP), an independent community-led body. and a collaborative, expert-informed planning process to increase renewable energy on Molokai. Yamashita said the situation is “a real call to action” to move away from the island’s reliance on fossil fuels.

“For me, the main takeaway for our community is the importance of really moving towards renewable energy resources for our island and moving away from our reliance on fossil fuels,” Yamashita said. “It’s a tough reminder, but it also fully puts the reality of what we’re dealing with right now.”

Although it’s never a good time to raise the cost of living, Yamashita pointed to the positive side that progress is already being made towards Molokai generating much of its own renewable energy, with a community planning process underway and working towards this goal with Hawaiian Electric.

“It confirms this work and highlights the urgency because we don’t know what future world markets will do for oil,” he said. “Whether it’s a hurricane cutting us off from fuel or a war in Ukraine, it shows how dependent we are on fuel across the ocean, it’s no way sustainable to live. Hopefully this is a real call to action to get to that place we’ve been talking about for decades – all the pieces are already in place.

With 50% of the island’s energy needs open to large-scale renewable energy, a Molokai community-led initiative called Hoʻahu Energy Cooperative worked to develop a framework for an energy cooperative proposal. owned by the community that would benefit residents and the environment.

Martin said Hawaiian Electric was also involved in the development of CERAP.

“For more than a year, we have participated in the Molokai Clean Energy Hui, a program of Sustʻainable Molokai,” she said. “Clean Energy Hui’s work to increase community knowledge about renewable energy and how the grid works on Molokai will help guide us on future plans with key insights and input from Molokai residents themselves.”

In the meantime, Martin said Hawaiian Electric is “working to coordinate efforts with resource organizations and programs on Molokai to find ways to support Molokai residents.”

“By consolidating what is available in financial support, combining our public education efforts to help people learn how to save energy in their homes and businesses, and researching other ways to provide support, we can hopefully reduce the financial impacts on struggling families,” she says.

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