MAYRA BELTRAN / HOUSTON CHRONICLE VIA AP
The Exxon refinery in Beaumont, Texas, remained flooded in areas on Monday in the wake of Hurricane Rita. How Hawaii's gas prices will be affected by the hurricane-ravaged Gulf Coast remains to be seen.
With the maximum cost for wholesale gasoline set to go up by a quarter on Monday, opponents of the state's price cap have renewed calls for the law's repeal or suspension by the governor.
But what would repealing the law do?
The short answer from analysts: Nobody knows for sure.
"Hawaii is a unique gasoline market," said David Hackett, president of Stillwater Associates, an oil and gas industry consulting firm, in an e-mail. "Everyone who participates in this market struggles to find an accurate way to measure it with outside benchmarks."
Supporters of the "gas cap" stand by the law, arguing that with more time mainland markets will stabilize and Hawaii consumers will benefit. The new law ties Hawaii's prices to three mainland markets, including the hurricane-ravaged Gulf Coast.
Opponents say that because Hawaii's oil is imported from Alaska and Asia, island prices would not have increased as drastically as they have in recent weeks but for the price cap.
House Republicans, who oppose the cap and want it repealed, contend that Hawaii's prices are about 26 cents a gallon higher than they would be without the new price cap law.
The argument is based on calculations showing that retail gas prices in Oregon and Washington -- two states that also have refineries and import oil from Alaska and Asia -- have only gone up about 6 cents since Sept. 1, compared with Hawaii's prices, which have increased 32 cents.
"It's killing us that they're making our price dependent on other markets," said Rep. Galen Fox (R, Waikiki-Ala Moana).
Hackett said the comparison "may be relevant," but he has not done a similar analysis.
Jack Suyderhoud, a business economics professor at the University of Hawaii, said he also had not done the analysis. "Using these prices as a benchmark is not unreasonable," he said in an e-mail. "However, I don't know if the movement of Hawaii prices would have matched the movement of the (Washington) and (Oregon) prices."
House Majority Leader Marcus Oshiro (D, Wahiawa-Poamoho) has called the GOP's comparison with the Pacific Northwest misleading.
Since the law took effect Sept. 1, consumers here have seen abnormally large price fluctuations. During the first two weeks of the caps, wholesale prices increased 72 cents before coming down 59 cents in the past two weeks.
Price caps for next week are 25 cents higher than this week, reflecting an increase in spot wholesale gas prices in the Gulf Coast, New York and Los Angeles -- the three markets upon which Hawaii's price cap formula is based.
Larger increases are expected nationwide as oil companies continue what is expected to be a slow recovery from Hurricane Rita, the second storm to cause major disruptions to Gulf Coast oil facilities in the last month.
On the Gulf Coast, about a dozen refineries in Texas and Louisiana have yet to restart after suffering damage and power failures from Rita.
"The overall picture for the refineries is bleak," said Scott Meyers, senior trading analyst for New York brokerage Pioneer Futures Inc.
Hawaii has seen a slight lag before island prices mirror mainland trends, largely because the weekly caps are posted each Wednesday and based on data from the five previous business days.
Still, Hawaii's statewide average for regular unleaded has been the highest in the country since last week, coming in at $3.27 a gallon yesterday, 25 cents higher than runner-up Washington, D.C., and 46 cents higher than the national average, according to AAA's Fuel Gauge Report.
Under the new price caps, if refiners and wholesalers charge up to the maximum allowed, the cost for regular unleaded on Oahu could be about $3.30 a gallon, including all adjustments, taxes and an assumed dealer markup of about 12 cents. Prices could be about $3.41 on Kauai, $3.46 on Maui, $3.38 in Hilo and $3.40 in Kona.
In some locations, prices are already at or above those projections.
Dealer markups are not governed by the price cap, but supporters of the law say there is enough competition at the retail level to keep prices competitive.
On Oahu yesterday, prices ranged from $3.10 and $3.11 a gallon in Manoa and Kahala, respectively, to $3.19 a gallon at stations closer to downtown. One of the lowest prices was at Costco Wholesale Club in Iwilei, where regular unleaded sold for $3.08 a gallon.
Under the current caps, Oahu prices would be about $2.92 a gallon without any dealer markup. It is unclear exactly how much of gasoline costs are markup versus wholesale costs, because wholesale prices are kept confidential for competitive reasons.
Oshiro has said the competition is good, and called it "positive that consumers are now shopping around for the best prices."
Opponents argue that motorists are shopping around for prices that are higher than they should be because of the caps.
Without the caps, Suyderhoud said, prices in Hawaii likely would revert to previous trends: less tendency to spring up quickly or come down quickly.
Price cap supporters say isle pump prices have historically increased any time mainland oil production has been affected and that the cap will help bring fairness to island prices.
The Associated Press contributed to this report.