Statewide gasoline consumption this year appears to be flat or declining despite a booming state economy and record numbers of tourist arrivals.

State statistics show a modest decline of about 2.8 percent in gasoline consumption in the first seven months of this year, which may be a signal that gas prices in Hawai'i are finally high enough that tourists and residents are choosing to drive less.

On the Neighbor Islands, where gas prices are generally higher than on O'ahu, gasoline consumption dropped by more than 11 percent last year, and is on track to drop by another 4 percent this year, according to state tax statistics.

Those statistics from the state Department of Taxation do not include data for August, or for this month when prices soared nationwide because of anxiety over Hurricane Katrina, and because of damage the hurricane did to Gulf Coast refineries.

On O'ahu, where the bulk of the state's gasoline is sold, consumption grew by almost 11 percent last year before apparently slowing this year. Honolulu motorists thus far this year have used 2 percent less gasoline than they did during the same period last year, according to the tax department statistics.

Gasoline consumption normally increases when the economy is healthy. More tourists generally means more rental cars are in use, and low unemployment usually means more residents are driving to and from work, and businesses are on the road delivering goods and services.

The state tax statistics showed that pattern in recent years, when gasoline consumption in Hawai'i grew from about 410 million gallons in 2001 to nearly 460 million gallons last year.

Marcia Sakai, dean of the college of Business and Economics at University of Hawai'i-Hilo, said she would expect that overall consumption would continue to rise because of the growing economy, but growth in the business sector might be offset by individuals who are reducing their personal gasoline use.

Gradual price increases might not have much effect on consumer habits, but the recent surge in gas prices probably has consumers doing mental calculations on the cost of each trip, she said.

"The jumps are causing me to think about how much I'm spending on gas, and I think there's a kind of a psychological behavioral effect," Sakai said. "Right now, that's what's happening. The jumps are so big that it makes me pay attention to what I'm spending on gas."

Last week, prices on O'ahu were more than $3 a gallon for regular. They could top $4 in some parts of the Neighbor Islands this week when the state Public Utilities Commission raises the state's cap on gasoline prices.

By comparison, average price of gas in Honolulu was about $2 a gallon at the beginning of 2004, and about $2.30 at the end of last year. Neighbor Island prices were higher, with Lana'i topping $3 a gallon in 2004.

Consumers on the Neighbor Islands might be more sensitive to gas price increases than O'ahu because Honolulu residents on average are wealthier, Sakai said. The median family income is higher on O'ahu than on the other islands.

Another possibility is that demand for gasoline on O'ahu may be driven more by businesses, while demand on the Neighbor Islands may be driven more by individual motorists, Sakai said. Companies may be forced to use gas for business purposes even after rising gasoline prices prompt individual consumers to cut back.

Albert Chee, spokesman for Chevron Corp., said he has not reviewed the tax department's consumption statistics for this year, but said a 2.8 percent statewide change in consumption is not a large swing. Gas consumption statistics fluctuate from month to month, but Chee said he would be surprised to see a sudden drop in statewide gasoline use.

A number of studies of the Hawai'i gasoline market observed the state has an "inelastic" demand that does not change much, Chee said. Demand often spikes in Mainland markets such as Southern California on long weekends as families go for long-distance drives, but there are far fewer opportunities for that in Hawai'i.

"This marketplace generally does not behave that way," Chee said. "The market doesn't really expand or contract much on a relative basis, and that's because living on an island people's driving patterns are generally (routine) — gotta get to work, gotta get the kids to school, gotta do my grocery shopping."

If the apparent drop in gas consumption seems odd to the experts, it is no mystery to Neighbor Island motorists such as Big Island resident Sandra Nozoe.

Nozoe said she moved from Pahoa to Hilo a year ago to get closer to her job at a Hilo building supply company. The move put an end to her 40-mile round-trip daily commute to work.

"We moved into town purposely because the drive back and forth was getting to be too much," Nozoe said. "The extra drive back and forth was getting to be expensive."

Even with the recent increases in price, Nozoe estimated her monthly bill for gasoline living in Hilo is one-third of what it was when she lived in Pahoa.

There are other signs that Neighbor Island residents in particular are looking for ways to use less gas.

Tom Brown, transit administrator for the Big Island's Mass Transit Agency, said ridership on the modest bus system that serves Big Island residents grew by 15 percent in the year ending June 30.

Brown said he "definitely" sees a link between gas prices and interest in public transportation, especially for people who regularly travel long distances. Some routes are running at near capacity now, and Brown said the county is considering expanding service in some areas.

Don Medeiros, deputy director for the Maui County Department of Transportation, said bus ridership on the small system there is up 150 percent from a year ago, although county officials attribute the increase in large part to improvements the county made in the system over the past year.

On O'ahu, bus ridership has been running about 4.5 percent higher in the first half of this year as compared with the same period last year, said James Burke, acting chief of the public transit division for Honolulu's Department of Transportation Services.

Burke said ridership has still not rebounded to levels before the bus strike two years ago, but the growth has been strong considering the city also imposed hefty bus fare increases in 2003.

"We're having a remarkable recovery," Burke said of the ridership.

WHAT WE CONSUME

Here is the annual gasoline consumption on O'ahu and the Neighbor Islands from 2000 to 2004. Figures are in millions of gallons of gasoline.

O'AHU 2000 2001 2002 2003 2004

251.9 264.5 275.6 264.2 292.4

NEIGHBOR 2000 2001 2002 2003 2004

ISLANDS 149.1 145.4 154 188.3 166.9

Source: Hawai'i Department of Taxation

Reach Kevin Dayton at kdayton@honoluluadvertiser.com.