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LANAI CITY – Thursday morning, the people of Lanai woke up to higher gasoline prices – $3.14 for regular.

That isn't the highest in the country. It isn't even the highest in Maui County.

At Hana Gas, regular has commanded $3.16 since October.

Nobody in Hana is making much of a fuss. A resident, who declined to give his name, shrugged. “We have no choice.”

Iki Manrique said he doesn't pay attention to what gasoline costs him since there's nothing he can do about it. But when he drives into Kahului is when he fills up.

But retiree John Akana said he doesn't drive far and tries to be sure he takes care of all of his errands in a single trip.

“When I drive, it's only a short way from my house to the store,” he said. “But when I have to go into Kahului or Wailuku, I have to fill up and it's $40, $50. When I take my wife over, I make sure she makes all of the doctor's appointments on the same day to get them all out of the way.”

Around the county, prices for regular gas this week ranged from $2.70 on most of Maui, to $2.81 on Molokai, to the highs in Hana and and Lanai. For a driver putting in 12 gallons, that's a bill of about $32.40 in Central Maui, $33.70 on Molokai, $37.69 on Lanai and $37.92 in Hana.

Maui County has consistently had the highest gas prices in the state over the years. According to AAA, average gas prices in Honolulu last week were $2.33 a gallon, and in Hilo, $2.43.

While the perception is that Lanai residents don't need to drive much, since almost everything is available right in town in Lanai City, the higher fuel prices affect them in other ways, including bigger bills for electricity. And while Lanai drivers don't have long distances to go, that also means lower mileage when they do need to get somewhere.

It's about 8 miles from Lanai City to the Manele Bay Resort on Lanai's south shore and just over 8 miles to the north shore at Maunalei. But then it's another 8 miles of gas-eating dirt road to get to hunting and fishing grounds at areas such as Polihua or Keomoku.

Hotel worker Kathy Maioho said she doesn't pay attention anymore to what she pays for gas for her truck. “I just pay the bill. You have no choice,” she said.

Another resort worker said she is paying about $50 a week, mostly for driving to and from work, but also for all the little errands that require her to drive even the short distances in town.

Wally Tamashiro, with Richard's Shopping Center, said he's not keeping track of how much more fuel costs his business, but it's hard to pass on higher costs to Lanai residents who already pay more for everything.

“I guess we just have to eat that expense,” he said.

Eric Dixson, general manager of Lanai City Service, says only hunters, four-wheelers and a few businesses that use trucks consume much gasoline. He feels the squeeze, too. Every three months or so, “Debbie from Maui Oil gives me the bad news.”

Until Thursday, he was selling regular for $3.07. He's been warned to expect another seven cents increase after New Year's.

Alex McBarnet at Maui Oil says the apparent jumps are really no bigger on Lanai than elsewhere in the county.

Whereas on Maui, a gas station might order a new tankful every couple of weeks, at Lanai City Service, a shipment typically lasts 12 to 14 weeks.

When the new load comes in, all the world oil price increases of the past three months are handed out to the customers at the same time.

Dixson says his company's owner, Jim Coon of Trilogy Excursions, has made the decision not to make any increases, other than the pass-through of whatever Maui Oil charges him.

“Our yield goes down every time we do this,” says Dixson, because Lanai City Service pays a percentage of its gross to its landlord, Castle & Cooke.

As the gross price rises, the percentage goes up, too, even if the number of pennies per gallon sticking with the operator does not change.

Dixson says if he didn't do it that way, “the perception is, we're gouging.”

“It's pretty difficult, but gas is not our primary business,” he says. “We're in the hospitality business.”

Lanai City Service does not make a profit on gasoline sales. But it hopes to on car rentals and other services. As the only vendor on the island, Dixson says, he's in a tough situation.

The biggest consumer of petroleum on Lanai is Maui Electric Co., which buys diesel for its generators.

President Ed Reinhardt says that even though the world price of oil has dropped well under $50 a barrel, by the time his petroleum is refined and delivered, he's paying $82.88 “in the tank” on Lanai. A year ago, MECO was paying $64.66.

Changes in fuel prices are passed through month by month, up or down as the case may be, so MECO does not have to go to the Public Utilities Commission to ask for rate changes when fuel prices become volatile.

As a result, Lanai electric customers are paying 27.6 cents per kilowatt-hour this month. In January, it was 21.84 cents.

“It affects our total customer base,” says Reinhardt.

Consumption is down slightly on Lanai and Molokai, where electric rates are higher. That is a function of the smaller overall production.

The more electricity you can make in one place, the less each unit costs, which means that Hana customers at least benefit from the larger customer base of Maui.

Although Maui customers also are paying more per kilowatt-hour, usage is climbing by 4 percent this year.

Some of that comes from new construction, but usage per residence also is rising, apparently because more people are using more electricity, primarily for air conditioning.

“It's good for business,” says Reinhardt, but not for the demand side management (DSM) program mandated by the PUC.

“It's something that's going to affect all of us,” and MECO is going “to focus more on renewables.”

Besides what they pay for their own driving, taxpayers buy gasoline for county vehicles.

In the last fiscal year, the county literally began to run out of gas with more than a month to go because the rising price of fuel had caused departments to go over budget on fuel costs.

The public works department exceeded its budget for fuel by April for the fiscal year that ended June 30, and Public Works Director Gilbert Coloma-Agaran ordered its gas pumps closed to nonessential vehicles.

For the current budget, Finance Director Kalbert Young says each island has its own budget for vehicles, and so far each is holding its own on the fuel budget for the fiscal year that ends in June.

The parks and public works departments are probably most affected by rising fuel prices, and managers “are evaluating what the budget can carry through to the end of June.” County departments are trimming discretionary fuel uses.

Young says fuel was budgeted conservatively, but if prices get out of hand, the administration could ask the County Council for a supplementary appropriation.

But, says Young, Mayor Alan Arakawa's preference is not to ask for supplemental spending approvals on continuing operations. Departments will just have to tighten up.