Lawmakers split over proposed repeal of gas cap
State lawmakers appear split on whether to maintain the price cap on wholesale gas prices.
The House is expected to vote this week on a measure to suspend the gas cap for 18 months and put strict transparency regulations in its place that would force more oversight of the oil industry's pricing. The measure passed out of three House committees earlier this week by unanimous consent.
Of the 41 House Democrats, 23 have shown support for a temporary or permanent repeal of the gas cap.
But support for the cap is stronger in the Senate.
A key Senate lawmaker said he plans to hear a measure that would keep the price cap and adjust the law with amendments that could bring down the cost of gas by an estimated 16 cents a gallon.
Senate Consumer Protection Chairman Ron Menor (D, Mililani) has said he would not support any proposal to repeal or suspend the price cap.
"I strongly disagree with the House position," Menor said.
Gov. Linda Lingle, who also has introduced a bill to repeal the cap, said she was encouraged by the House action this week.
"I'm glad they're moving in that direction," Lingle said. "I think that's a good thing."
She said members of her administration would seek to work with House lawmakers to possibly incorporate some of her proposals on price transparency and oversight.
Meanwhile, the state's price cap on wholesale gasoline will drop 16 cents next week, the Public Utilities Commission announced yesterday.
The decrease comes on the heels of a 10-cent decline in this week's caps and a 3-cent dip last week, and puts the cap at its lowest point of 2006.
Price caps, which represent the maximum rate at which wholesale gas can be sold in Hawaii, are based on an average of spot prices in the Gulf Coast, New York and Los Angeles.
That base-line average this week is $1.4993, about 5 cents lower than the caps for the week of Jan. 2, the previous low point for 2006. The caps lowest base line since the legislation took effect in September was $1.4655 during the week of Dec. 5.
If wholesalers charged up to the maximum allowed, the price for regular gas is projected to range next week from $2.52 a gallon on Oahu to $2.89 a gallon on Lanai. The statewide average could go to $2.69 a gallon.
Those estimates include taxes and an assumed dealer markup of 16 cents.
Yesterday's statewide average of $2.86 a gallon was 59 cents higher than the national average, according to AAA's Fuel Gauge Report, which bases its price survey on credit card transactions from the previous day.
Analysts say they expect fuel prices across the country to drop as retail prices catch up with wholesale prices, which have been driven down by lower crude oil prices.