Drivers could see prices drop to $2.70 or lower for a gallon of regular gasoline on O'ahu next week as the state's wholesale gasoline price cap declines for a third consecutive week.

Advertiser calculations show the cap will decline by an estimated 18 cents a gallon on Monday. The Hawai'i Public Utilities Commission will announce the new price cap today.

"Eighteen cents is great, but it should be even lower," said Keoni Soares, 33, of Kaimuki. "I think like everyone else it's too high."

Each Wednesday the PUC announces a new wholesaler price cap that will take effect the following Monday. The maximum price wholesalers can charge on O'ahu dropped by 12 cents on Monday and followed a 44-cent decline the previous week. The cap applies only to wholesale prices and doesn't regulate what stations charge at the pump.

Gasoline prices are coming down on the Mainland as refineries restart after repairing damage from hurricanes Katrina and Rita, and because motorists aren't using as much fuel. The U.S. Minerals Management Service reported refineries operated at 81.9 percent of capacity last week, up 2.8 percentage points from a week earlier.

Only four refineries knocked out from the hurricanes remain idle and are expected to come back on line in coming weeks.

Hawai'i's price cap is tied to wholesale prices in New York, the Gulf Coast and Los Angeles and is computed once a week. The law is an attempt by lawmakers to address driver complaints about prices never dropping as they do on the Mainland.

Hawai'i's fuel prices are the highest in the nation. The average price of a gallon of regular in Honolulu on Monday was $3.053, according to the American Automobile Association's Daily Fuel Gauge Report. That compared with the national average of $2.613.

Proponents of the gasoline cap argue Hawai'i prices should be compared to Mainland prices 10 days earlier because of the lag in implementing the price cap and retailers adopting new pricing. The national average 10 days ago was $2.82.

A check of Honolulu stations yesterday showed many had yet to cut gasoline prices from a week earlier and were still in the $2.97 to $2.99 a gallon price range for regular at noon. A Mahalo station on Nu'uanu sold gas for $3.09. Most stations don't cut prices until they receive new shipments at the lower wholesale price.

Other stations, such as Lex Brodie's on Queen Street, and Kahala Shell on Wai'alae Avenue, sold regular grade for $2.87 a gallon, respectively. Costco in Waipi'o and Iwilei priced its regular at $2.79 a gallon.

The Advertiser calculation of next week's price cap are based on data from Bloomberg News while the state uses figures supplied by the Oil Price Information Service.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.