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Hawaii: Gas cap could raise prices 30 cents State’s price cap law goes into effect Sept. 1, tying prices to mainland rates, so initial limit higher than current gasoline rates The Associated Press
The price of regular unleaded gasoline on Oahu could rise to nearly $3 a gallon under the price cap law that goes into effect on Sept. 1, according to the state Public Utilities Commission.
Because the gas cap is based on mainland rates, which are at record highs, the price limit initially will be set higher than current prices.
In a “dry run” in preparation for implementing the law, the commission posted on its Web site on Aug. 17 a sample of weekly maximum pretax wholesale prices of gasoline which will become the upper limit on wholesale gas prices in the state once the law takes effect.
The PUC calculated the wholesale cap for regular unleaded on Oahu at $2.85 a gallon, including taxes.
If wholesalers charge the maximum $2.85 and retailers keep their usual 12 cent per gallon markup, prices could approach $3 a gallon.
The state’s major wholesalers have not said whether they plan to charge the maximum allowed under the cap, but economists and state consultants expect they will.
The statewide average price of a gallon of regular unleaded reached a record $2.77 on Aug. 18, according to AAA. In Honolulu, the average price hit a record $2.68. Commission can set maximum wholesale price The new law allows the Public Utilities Commission to set a maximum wholesale price at which gasoline can be sold in Hawaii, based on the weekly average of spot prices in Los Angeles, New York and the U.S. Gulf Coast.
The law would not put a cap on retail prices.
State Sen. Fred Hemmings, R-Lanikai-Waimanalo, said he wasn’t surprised by the commission’s figures.
“Even if the numbers were a little more favorable, the principle is still entirely wrong,” he said. “You don’t come into a marketplace and have politicians set prices on consumer products.”
Despite the possible rise in prices, the gas cap legislation should go forward, said House Speaker Calvin Say, D-St. Louis Heights-Wilhelmina Rise.
But he said if prices are at higher levels than elsewhere in the country, the governor can consider suspending it.
Under the law, Gov. Linda Lingle can suspend the cap if there is a major adverse impact on the economy, public welfare or the health and safety of people.
But Hemmings said lawmakers shouldn’t be “passing the buck” to the governor. He said the majority Democrats in the Legislature should instead call a special session to rescind the law in its entirety.
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