Hawai'i drivers are unlikely to get a promised 11-cent-a-gallon tax break on gasoline any time soon.

That's because several proposals to roll back an excise tax on gasoline that began Jan. 1 are stalled in the Legislature. And any gasoline tax break likely would be a tax refund, which can't be claimed until next year.

So for the foreseeable future, Hawai'i consumers probably will continue to pay the highest gasoline taxes in the nation.

"I'm really upset about it," said Kailua retiree Rita Frank. "I think I'm being ripped off every time I buy gasoline — by the government."

At the beginning of the year, a state tax break for ethanol-blended gasoline expired. If lawmakers reinstate the break, the total tax at the pump would fall to 50.2 cents a gallon, a figure that includes federal, state and county taxes.

That would drop Hawai'i from No. 1 to No. 10 on the list of states with the highest gas taxes, according to a survey by the American Petroleum Institute.

"I think ... (lawmakers) saw the money signs and said we can keep the money and not give it back" to taxpayers, said 'Ewa Beach resident Garry Smith. "It affects all of us.

"Every time you go to the store you have to pay extra for the taxes paid on the gas used to deliver food."

RUNNING ON FUMES

Several key lawmakers had pledged to push for some relief after taxes on a gallon of regular gasoline in Honolulu rose 11 cents to 61.5 cents on Jan. 1 — a tax hike that drove retail prices up a similar amount. As many as eight bills were introduced proposing some form of gasoline tax cut.

Now, with about one month left in the legislative session, several lawmakers said the tax cut has been derailed. They say the reasons are that the tax cut would reduce government revenue by $35 million to $40 million and that there is uncertainty over ensuring that any tax cut would be passed along to consumers.

"The prospects don't look too good," said state Sen. Ron Menor, D-17th (Mililani, Waipi'o). "I think it's going to be an uphill struggle."

The proposed tax cut has to be balanced against other legislative priorities, including creating an earned income tax credit and a tax credit for food costs, said state House Majority Leader Kirk Caldwell, D-24th (Manoa).

"It's a big amount," Caldwell said. "We're just waiting to see what kind of financial impact that this has compared with some of the other things we want to do.

"I wouldn't say it's a dead issue. But I would not dispute that it's an uphill struggle."

Gasoline prices have been rising. The average national pump price has risen nearly 54 cents a gallon since Feb. 1, according to the AAA Daily Fuel Gauge Report.

During the same period, the average Honolulu price has risen just 11 cents a gallon. Hawai'i gasoline prices typically track national prices on a lagging basis.

THERE'S A CATCH

Even if the exemption is reinstated, however, that might not automatically translate into lower pump prices. That was the case last April, when the general excise tax exemption on gasoline took effect, reducing taxes by 11 cents a gallon.

But the tax cut went largely unnoticed because it took effect when oil and gasoline prices were rising. Between April 1 and 7 of 2006 — when the excise tax on gasoline expired — the average price for regular in Honolulu rose nearly 3 cents a gallon, according to the AAA Daily Fuel Gauge Report. However, between Jan. 1 and 7 — when the tax was reinstated — the average price at the pump rose 9 cents a gallon.

Lawmakers maintain that pump rices should have fallen along with taxes in April 2006.

A spokesman for one refinery said the prices are passed along.

"The various taxes on gasoline do contribute to the price consumers pay for gasoline at the pump," said Nathan Hokama, a spokesman for Honolulu oil refiner Tesoro Corp. "If the (tax) exemption is reinstated, the tax will no longer be collected or remitted, so the cost of fuel would be reduced."

Lawmakers are unlikely to cut gasoline taxes without also creating a mechanism to ensure savings are passed along to consumers, said both Menor and Caldwell.

One option may be to give drivers an income tax credit equal to the excise tax on gasoline. But even if such a proposal passes, drivers would have to wait until the end of the year to file to get the credit.

Reach Sean Hao at shao@honoluluadvertiser.com.