The state Public Utilities Commission lowered Hawai'i's wholesale gasoline cap for an eighth consecutive week, snipping almost one cent off the maximum that can be charged to service stations.

The cap starting Monday will decline to $1.7505 on O'ahu from $1.7581 this week. The amount of the cut is the lowest since the cap took effect on Sept. 1.

Retail gasoline prices have generally moved the same direction as cap changes.

As of Tuesday motorists paid an average of $2.66 for a gallon of regular statewide, or the highest prices in the nation, according to the AAA Daily Fuel Gauge Report.

That compared with the national average of $2.14. Hawai'i is the only state where drivers pay more than $3 a gallon for diesel, which isn't covered by the cap law. Local motorists paid $3.347 on average for diesel or 74 cents more than the average nationally, AAA data shows.

Declines in wholesale gasoline prices had been bigger in previous weeks as gasoline inventories and production were restored following hurricanes Katrina and Rita. Recently they've moderated on speculation about rising consumption and refineries switching to produce more heating oil and diesel.

The cap is computed using market data from New York, the Gulf Coast and Los Angeles.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.