State to hire
gas price probers

A mainland law firm will look at
why isle costs are the tops in the U.S.

By Rob Perez
Star-Bulletin

The state is on the verge of hiring a mainland law firm specializing in antitrust issues to investigate Hawaii's highest-in-the-nation gasoline prices.

Gov. Ben Cayetano disclosed the development at a gubernatorial candidate forum in Kapolei last night.

He said the law firm - Hosie, Wes, Sacks & Brelsford of San Francisco - will team with a local firm to conduct the investigation, looking at the possibility that oil companies have overcharged Hawaii dealers for their gasoline.

Ted Clause of the attorney general's office said Hosie Wes will advise the state "in connection with recovery of alleged overcharges in gas prices in Hawaii."

The mainland firm is to take the case on a contingency basis, meaning it will collect attorney fees only if it wins a possible lawsuit against the oil companies, Cayetano said.

The decision to move forward on an investigation follows a series of Star-Bulletin reports the past several months that indicated oil companies here are making huge profits from gasoline sales.

Critics have questioned why Hawaii wholesale and retail prices have changed little over the past year and a half while the cost of crude oil has plunged, triggering dramatic drops in mainland gas prices.

The governor attributed Hawaii's high prices to what he called a lack of competition at the refinery level. Hawaii has two refineries.

"We have been captives of these refineries," he told a small audience at the candidate forum.

Oil company executives could not be reached for comment last night. But they have said repeatedly that local prices are fair and are based on competition in the marketplace. They also have said they would welcome an investigation.

Cayetano wasn't sure when the investigation would be completed.