Diesel gas prices broke the $4-a-gallon mark statewide for the first time yesterday as crude oil prices continued to trade near record highs.

The average price for a gallon of diesel hit $4.014 with prices topping the $4 mark on the Big Island and Maui, according to figures provided by the American Automobile Association's Daily Fuel Gauge Report. Honolulu prices are just under $3.90 a gallon, having risen 47 cents in the past year.

"It's gone up quite a bit," said Jon Cuneo, financial controller for Pineridge Farms Inc., the state's largest construction trucking company with a fleet of about 80 trucks and about a similar amount of construction machinery.

"It's our second or third highest cost in the company."

The new record price for statewide diesel costs may be a precursor to the average state-wide gasoline price reaching $4 a gallon in the next several months. Crude oil for April delivery traded near a record $110.20 a barrel in New York yesterday.

AAA Hawaii spokeswoman Marie Montgomery said it appears that price increases for diesel and other commodities can be traced to investors buying it as a hedge against inflation. Hawai'i joins six other states with diesel prices averaging above $4.

"Investors are parking their money there because they perceive these commodities as a safe investment," Montgomery said, explaining the price rise isn't tied to a jump in demand for petroleum or a problem with supply.

"There's so much money looking for a place to go that it actually has affected gas prices."

The price of a barrel of oil rose as the dollar dropped to an all-time low against the euro and its lowest rate against the yen in more than a dozen years.

"People are buying oil as a hedge against the weakening U.S. dollar or perceived inflation risk, not because of any shortage of oil," Tim Evans, an energy analyst at Citigroup Global Markets Inc. told Bloomberg News.

Explanations of increasing oil prices are little consolation to people who drive diesel cars and trucks, or operate fuel-thirsty machinery. Cuneo said Pine-ridge is having to absorb the price increases and that it also faces higher prices for tires, another big expense for the company, because petroleum is used in their manufacture.

The increase helped Pineridge to decide on the purchase of an automated dispatching system that employs specialized software and global-positioning technology to help make its drivers and dispatching more efficient. That will help cut down on travel times and finding the truck closest to a job site, Cuneo said.

According to the state Data Book, motorists bought 50.1 million gallons of diesel in 2006, while another 177 million gallons was used for equipment, off-highway travel and boats.

That compares to about 472.7 million gallons of gasoline purchased in Hawai'i during 2006.

The statewide average price for a gallon of regular gasoline also crept closer yesterday to the $3.684 record established in September 2005, shortly after U.S. gasoline supply was crimped by hurricanes Katrina and Rita. The price was $3.606 a gallon yesterday, still the highest in the nation, according to AAA.

In general, gasoline prices follow petroleum prices, though they lag the gain by weeks or months. Cuneo said he doesn't expect the price gains to stop anytime soon given what's been happening.

"There's no doubt in my mind," he said.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.