Debate rises as gas cap falls
Backers say isle prices follow national trends more closely; however, critics are unconvinced
The statewide average price for gasoline next week could go below what it was on Aug. 31, the day before the state's one-of-a-kind gas cap law took effect.
While Hawaii's average would likely remain the highest in the country, supporters of the gas cap law say that is nothing new.
The difference now, backers say, is that Hawaii prices are following mainland trends more closely, as opposed to in the past when island prices were slower to fall during mainland price declines.
"We asked consumers to give this law some time because of the two hurricanes, and we're finally starting to see a much truer picture of how the law was intended to work," said House Majority Leader Marcus Oshiro (D, Wahiawa-Poamoho).
Gas cap opponents, who note that Hawaii prices also increased at a slower rate when mainland prices spiked, remained critical of the measure.
"I'm excited for us that we're seeing lower prices, but I still hold fast to the fact that I don't think that it should've gone up in the first place -- especially to the extent that it did," said House Minority Leader Lynn Finnegan (R, Mapunapuna-Foster Village). "It took a lot of money out of peoples' pockets that I don't think we had to pay."
Next week's caps, published yesterday by the PUC, are 18 cents lower than price ceilings for the current week. The decline comes after drops of 12 cents and 44 cents the previous two weeks.
If wholesalers charge up to the maximum allowed, the price for regular unleaded on Oahu is projected to cost about $2.63 a gallon after taxes. Prices would be about $2.74 on Kauai, $2.79 on most parts of Maui excluding Hana, $2.70 in Hilo and $2.72 in Kona. Lanai would have the highest projected cost at $2.99 a gallon, while Molokai would be at $2.90 and Hana would be $2.87.
Estimates include a conservative assumed dealer markup of 12 cents, although such charges vary from station to station and are not governed by the price cap.
These prices would put the statewide average for regular gas at $2.79 a gallon.
According to AAA's Fuel Gauge Report, the statewide average was $2.92 a gallon on Aug. 31, the day before the gas cap law took effect and the same week that Hurricane Katrina made landfall in the Gulf of Mexico, severely disrupting the nation's oil and gasoline supplies.
The slow recovery from Katrina, coupled with further damage from Hurricane Rita two weeks later, sent the national average for gas above $3 by mid-September.
Hawaii's prices followed suit, reaching a record high of $3.68 a gallon for regular on Sept. 18.
Critics said the increase was the result of the gas cap law, which ties island prices to an average of spot prices in the Gulf Coast, New York and Los Angeles. They noted Hawaii refiners obtain oil primarily from Asia and Alaska, and the prices would not have increased so dramatically but for the cap.
Supporters argued Hawaii's prices have historically followed mainland price spikes and probably would have been higher without the cap.
"They have no way of knowing that," said Melissa Pavlicek, a spokeswoman for the Western States Petroleum Association, an oil industry trade group. "I have no way of knowing what, in fact, prices would be because each company sets that on an individual basis."