Gas council to
look into gouging
complaints
Its first meeting Friday is
By Rob Perez
open to the public
Star-BulletinAn advisory council of gasoline industry representatives and state agencies meets for the first time Friday as part of a government effort to determine whether Hawaii motorists are being gouged at the pump.
The inaugural meeting of the Petroleum Advisory Council comes amid growing controversy over Hawaii's highest-in-the-nation gas prices.
Those prices -- regular unleaded at more than $1.50 a gallon on Oahu -- have barely budged even as the cost of crude oil has plunged over the past 15 months, helping trigger steep drops in mainland markets.
The council, authorized by a state law passed last year, will help the Department of Business, Economic Development & Tourism gather financial data and other information so the state can evaluate whether the industry and major oil companies earn reasonable profits on gas sales.
The department has been asked to report preliminary findings to legislators before next year's session.
Rep. Terry Nui Yoshinaga, House Energy Committee chairwoman who was instrumental in getting the 1997 law passed, said she hopes a price-benchmarking system adopted voluntarily by the industry will emerge as a result of the council's work.
That way consumers will know prices -- in good times and bad for the industry -- aren't based primarily on what the oil companies believe is the maximum customers will pay in a captive market, said Yoshinaga (D, McCully, Moiliili, Pawaa).
"You're not only forcing a ceiling on prices, but you're being fair on how they float up and down," she said. "There's got be a balance."
If the industry doesn't voluntarily adopt a benchmarking system, Yoshinaga said, the Legislature can consider mandating one once data is available to evaluate allegations of gouging.
The lack of data has hampered efforts in the past to determine whether gas prices here are artificially inflated -- a charge industry representatives repeatedly have disputed.
Previous investigations by the attorney general's office uncovered no evidence of industry collusion or unfair profits.
"These are extremely difficult questions," DBEDT Director Seiji Naya told legislators at a recent hearing. "Many experts have dealt with these before and don't have clear answers."
Independent of the council's work, Gov. Ben Cayetano has asked the AG's office to determine whether a formal investigation is warranted because of the pricing controversy.
An AG spokeswoman said no time frame has been set on when that decision will be made. The attorney general expects to hire outside anti-trust experts to assist in making the decision.
Naya said he expects the council to help resolve the long-standing allegations of price gouging. However, he doesn't expect the council to advocate measures hampering business.
"I'm a business advocate," Naya said. "I don't intend to choke business. I'd like to find out the truth. Beyond that it's up to the AG and others to act."
Friday's meeting -- open to the public -- will focus on organizational issues, including election of a chairman and discussion of parameters for a gas-price study.
The council, a permanent panel, will advise the state on industry trends and issues that may require legislative action.
Its membership of oil company executives, wholesalers, gas-station dealers and government representatives already is drawing criticism.
Lynell Takeuchi, owner of Kewalo Marine Services, a fuel supplier to the agriculture, construction and fishing industries, said she is concerned because there isn't enough small business representation.
"I don't think the big boys in the industry should be the ones policing it with government approval," she said.
Petroleum group
First meeting
Time: 9 to 11 a.m. Friday
Members
Source: DBEDT
