Gas caps have weathered Katrina, other start-up problems

THE ISSUE Warnings of shortages and refinery closings have failed to materialize in the first four months of regulated prices.

AFTER an inauspicious start that coincided with Hurricane Katrina's destruction of Gulf Coast oil facilities, Hawaii's gasoline price cap appears to have dodged the dire outcomes some energy experts and oil industry representatives had predicted.

Though there is no way to determine what post-Katrina prices consumers would have been charged without the caps, previous experience would indicate inordinate gasoline tabs similar to unregulated diesel fuel costs that have stayed high in Hawaii.

Four months after it went into effect, the unique gasoline cap has resulted in fluctuations in prices, reflecting spot wholesale costs on the mainland. However, warnings about refinery shutdowns, shortages and retailer closings have not materialized, as the Star-Bulletin's B.J. Reyes reported. Moreover, consumers might prefer the ups and downs in prices since in pre-cap days, ups were the norm even as wholesale costs dropped.

The caps, announced weekly, also allow drivers some control over their budgets, filling up their tanks when prices are lower and holding off when they rise. In addition, the caps insert an important awareness of conservation, that driving less often is an option for consumers.

The statewide average for regular gasoline is still about 50 cents above the national average, but the telling bottom line is that prices are well below pre-cap levels and by percentage, increases in Hawaii have been smaller than those on the mainland.

The cap eliminates the mystery of gasoline prices that had island consumers suspicious about gouging as oil companies heedlessly acknowledged that they held an oligopoly in the state. Now that drivers know how pricing is determined through the cap, the state Legislature should act on Gov. Lingle's proposal to seek more transparency of the oil industry by monitoring and reporting on production and other costs that go into gasoline pricing.

That would go hand in hand with recent calls nationwide for an investigation of whether the oil industry used Katrina as cover for boosting gasoline prices to unseen levels, even in markets that should not have been affected by the Gulf Coast disruption. After the oil companies reported record post-hurricane profits, Hawaii joined with other states in pressing the Federal Trade Commission to investigate.

However, the caps should not be traded for transparency, as Lingle -- who remains opposed to regulation -- has suggested. The governor, who has the authority to suspend the caps should they cause economic hardship or threaten public safety, has let the price caps play out to see what transpires. That's fair, and lawmakers should respond by objectively considering her proposal, but as an addition, not a substitute, to the caps.