Energy Costs very likely to impact Hawaii travel
Hawaii just turned corner on pandemic
On March 26, 2022, Hawaii will reopen to all domestic travelers without any restrictions. But another issue looms on the horizon...
It appears increasingly likely we're now moving from one major disruption to Hawaii's tourism to another. The crisis in Ukraine & Europe will likely cause additional disruption to Hawaii, just as the state tries to begin a stable recovery from the effects of COVID-19, as energy prices increasingly soar, now hitting record levels.
Business Insider reports gas prices could hit $5/gal or more on the mainland, and provided Hawaii's gas prices are already typically the second-highest in the nation, after California, the potential for $6+/gal gasoline in Hawaii isn't too far fetched.
In fact, analysts cited by NPR project that if oil prices hit $200/barrel, the retail price of gas would average $5.84 in the U.S. The last time gas prices were north of $4/gal was in 2012, and research performed in 2014 by the St. Louis Federal Reserve estimated that, at that time, Americans spent roughly 4% of their income on gas - one of the highest levels seen in 30 years. Unfortunately, the optimism for a quick recovery just a week ago could be at risk due to these developments.
Price increases will impact flight costs, the costs associated with rental vehicles (Turo or standard rental agency), and potentially impact accommodation rates due to increases in local electricity costs.
Despite ongoing attempts to pivot to greener and more sustainable energy sources, at this time, Hawaii still generates a significant amount of its electricity from petroleum fuels. This will affect industries and small businesses of all types in Hawaii.
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As Canary Media has stated, "Hawaii imports all of its oil, much of it from Russia itself."
According to HawaiiNewsNow, it's estimated Russian oil accounts for at least 25% of Hawaii's supply. As of early March 2022, that source of energy has now been cut off.
Additionally, the U.S. Energy Information Administration (USEIA) highlights that "Isolated by the Pacific Ocean, Hawaii is the most petroleum-dependent U.S. state."
Patrick De Haan, head of petroleum analysis at GasBuddy said, "Americans have never seen gasoline prices this high, nor have we seen the pace of increases so fast and furious. That combination makes this situation all the more remarkable and intense, with crippling sanctions on Russia curbing their flow of oil, leading to the massive spike in the price of all fuels: gasoline, diesel, jet fuel and more."
He added, "It's a dire situation and won't improve any time soon. The high prices are likely to stick around for not days or weeks, like they did in 2008, but months. GasBuddy now expects the yearly national average to rise to its highest ever recorded."
We're monitoring this situation closely and will keep you posted.
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This is a developing story, and will be updated...