Hawaii governor ends wholesale gasoline cap

Tara Godvin

Associated Press Writer

Hawaii Gov. Linda Lingle signed a bill ending the state’s cap on wholesale gasoline prices May 5 after saying she sees no situation in which she would ever use the power the new law gives her to reimpose price controls.

However, before signing the bill, the governor suggested that lawmakers should consider a system to limit oil company profits in the islands, saying she would submit a resolution to the Legislature next year seeking a study of possible state regulation of the industry.

“I can’t see any condition that I would reinstate the gas cap,” Lingle told reporters after speaking at a convention of the Hawaii Credit Union League in Waikiki. “It’s a bad idea and it’s not going to keep prices down for Hawaii.”

The new law passed by the Legislature on its last day May 4 gives Lingle, a longtime critic of the gas cap, the power to bring back the controls if she thinks fuel prices are too high.

The original law brought Hawaii’s wholesale gasoline prices under state control when it went into effect Sept. 1. However, local retail fuel costs continued to rise, making it difficult to know what impact the law has had for consumers.

“I am pleased that Hawaii consumers will no longer be subject to the failed experiment to artificially control gas prices,” Governor Lingle stated,” Lingle said in a statement following the signing.

The new law went into effect immediately with Lingle’s signature. But Lingle said she couldn’t predict how soon consumers would see any difference in their gas prices — either up or down — once fuel companies are again allowed to set their wholesale prices as high or low as they want.

“It’s such an artificial mechanism that you really don’t know what the true market is right now,” she said.

Lawmakers’ efforts in combating rising fuel prices are better spent on helping to develop other energy sources for Hawaii, such as the energy bills passed by legislators this session, Lingle said.

One measure increases the cap on the state income tax credit for installing solar panels on a single family home from $1,750 to $5,000 and for businesses from $250,000 to $500,000. Another authorizes a pilot project to begin installing the energy-gathering panels on the roofs of the state’s schools.

Lingle said Hawaii could also consider regulating gasoline companies similar to the state’s electric companies and interisland barge services.