Hawai'i's gasoline prices are set to tumble again next week, with retail prices projected to fall into the low $2.60 range for a gallon of regular on O'ahu.

The state Public Utilities Commission yesterday sliced the maximum wholesalers can charge for gasoline by 4 cents beginning Monday. The decline is the fourth cap cut since Oct. 16.

The cut should result in regular gasoline prices falling at O'ahu's lowest-priced stations to about $2.63 a gallon, said Harvey Shapiro, who has come up with a formula for calculating the price. Shapiro, who worked out the calculation outside his regular job as research economist for the Hono-lulu Board of Realtors, said the price includes 50.9 cents of fixed federal, state and county taxes, about 12 cents of state excise tax and a 12-cent allowance for retailer mark up.

The PUC said pre-tax wholesale price limits for O'ahu will be $1.8798 and $2.0208 on Kaua'i.

Maui's cap, excluding Hana, will be $2.0188, while Kona's cap will dwindle to $2.0468 and Hilo's to $2.0278.

Hawai'i's gasoline prices are the highest in the country, according to the American Automobile Association. As of Tuesday the state average was $2.947 for a gallon of regular, according to the AAA's Daily Fuel Gauge report. The national average was $2.467, or 48 cents less than Hawai'i's. The next closest state to Hawai'i is California at about 19 cents less.

Hawai'i began the nation's only wholesale price cap on Sept. 1 in an effort to link the state's prices with those on the Mainland. The price ceiling is calculated using wholesale prices from markets in New York, the Gulf Coast and Los Angeles.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.