New Hawaii petroleum tax hike likely to raise gas prices

Looking for money to finance renewable energy and food security, state lawmakers have agreed to increase a per barrel tax on petroleum products sold by distributors, which could cost consumers a few cents more per gallon of gasoline but eventually help wean the state off fossil fuel.

The barrel tax, which is now collected to help the state respond to oil spills, would increase from 5 cents per barrel product to $1.05. The $1 hike could generate $31 million a year to help the state explore alternative energy and protect local agriculture.

Depending on how the barrel tax is passed on to consumers, the price per gallon of gasoline could increase by 2 to 3 cents.

“It’s a tax that really could be called an investment and viewed as an economic stimulus for us, because it puts money where we need it most, in our energy and food infrastructure,” said state Rep. Hermina Morita, D-14th (Hanalei, Anahola, Kapa’a). “One of our biggest problems right now, especially in a down economy and with the general fund, is that both food and energy are long-term strategies to lessen our dependence on imports.

“In order to make this kind of transformation, we need dedicated funding.”

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