In Hawaii and around the world, fuel prices this year have surged to historic new highs.

Lanai locator map

The rollback of pandemic restrictions spiked demand for fuel as workers returned to the office and industries resumed operations. Oil refinery shutdowns and the war in Ukraine have strained supplies, propelling prices even higher.

It all came to a head this summer, when the average price of a gallon of regular unleaded gas in the U.S. topped $5 in mid-June, marking an all-time high. In Hawaii, gas prices peaked in July at an average of $5.62 per gallon, according to data from AAA.

But on Lanai, prices at the pump have followed a starkly different trajectory. Fuel at Lanai Service Station flipped overnight from being the most expensive in the state to the cheapest, even as the price of fuel elsewhere in Hawaii marched higher.

Amid surging oil prices, a sign at Lanai’s only gas station boasts the lowest fuel prices in Hawaii: $4.43 on a recent weekday. The average price statewide for regular gas on this day in late August was $5.32, according to data from AAA. Brittany Lyte/Civil Beat/2022

The cause of the island’s unexpected gas price reprieve? Its famous billionaire monopolist. Tech magnate Larry Ellison, who owns 98% of the island, bought Lanai’s only gas station and started subsidizing fuel prices on April 1.

The price of a gallon of regular gas plummeted on that date by $1.77 from $6.25 to $4.48.

A banner outside the business now proudly declares: “Lowest fuel prices in Hawaii.”

The average price of a gallon of regular gas in Hawaii is now $5.21. On Lanai, it’s $4.17.

“‘We deserve it,’ is how someone described it,” said Maui County Councilman Gabe Johnson, noting that residents on the remote island, which sits southwest of Maui, have historically been sacked with paying some of the state’s highest prices for gas.

Resident appreciation for lower prices at the pump is tempered, however, by concerns over Ellison’s dominating influence on this tiny island with a population of 3,000.

When the software mogul bought most of the island in 2012, the $300 million purchase included a third of the housing and the water utility. In recent years, he’s added more homes, businesses and real estate to his domain, including the island’s only newspaper, the main grocery store and a county building in the heart of town where residents gathered for community meetings.

Now the 11th richest person in the world also owns the four-pump gas station.

“When Ellison bought (the gas station), people were upset because he’s been buying up so much of the island, so many of the family businesses,” Johnson said. “It was like, ‘There goes another one!’ Like, isn’t owning 98% of the island enough?”

The billionaire's growing control of island assets has created a unique dynamic in which residents who consider Ellison their employer, landlord or both avoid speaking publicly about him and his dealings because they say they fear retaliation. A half dozen residents would talk to a reporter for this story only on the condition of anonymity — even for a seemingly innocuous news article about subsidized gas prices.

Pulama Lanai, the management company that oversees Ellison's majority stake in the island, declined to comment for this story, according to spokeswoman Lyssa Fujie. Cashiers at the gas station also wouldn't discuss why the price of fuel dropped so dramatically this spring.

Software billionaire Larry Ellison bought Lanai's only gas station in April. In recent years he also purchased the island's only newspaper and its main grocery store, generating concern among residents about the tech entrepreneur's monopoly control over island assets. Brittany Lyte/Civil Beat/2022

Concerns about the implications of Ellison's expanding empire on the island's character and resident quality of life aside, Johnson acknowledged that the price break at the pump is helpful to many, especially as the toll of inflation hikes the cost of food and other essentials.

Lanai residents pay some of the highest electricity rates in the state, for example, with the average customer now spending more than $225 on their monthly bill.

The gas station was formerly owned by Jim and Randy Coon of Trilogy Excursions, a sailing adventure company established in 1973.

Under the Coons’ ownership, the gas station, named Lanai City Service since 1983, was best known for two things: Expensive fuel and Thanksgiving dinner. Every November the gas station provided island residents with a free holiday turkey.

“People were bitter about (the high gas prices), but they were happy to have their turkey,” Johnson said.

Civil Beat’s coverage of Maui County is supported in part by grants from the Nuestro Futuro Foundation and the Fred Baldwin Memorial Foundation.

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