Gas cap forecast predicts 12-cent hike next week
The state's wholesale gasoline price caps are expected to climb 12 cents a gallon next week, according to preliminary calculations by the Star-Bulletin.
There was a drop in crude oil prices nationally yesterday, but the decline is unlikely to significantly offset gains of the past week, which are expected to boost Hawaii prices when the Public Utilities Commission sets the weekly gas caps tomorrow.
The PUC sets the gas caps for the following week based on wholesale prices in three mainland markets.
Meanwhile, debate over the effectiveness of the new gas cap law is expected to continue today as House and Senate lawmakers complete work on hundreds of bills ahead of Thursday's deadline to exchange proposals for further crafting.
House lawmakers want to suspend and ultimately repeal the cap, while the Senate is pushing a proposal to amend the law.
In preparation for receiving the Senate bill, state Rep. Kirk Caldwell, one of the main opponents of the gas caps in the House, asked the Department of Business, Economic Development and Tourism whether it had studied the law's effectiveness.
The department provided an analysis that estimated Hawaii's consumers paid an average of 27 cents more a gallon for regular gasoline in the five months after the caps took effect.
The chief author of the price cap law, Senate Consumer Protection Chairman Ron Menor (D, Mililani), dismissed the study as political, noting that the agency and the Lingle administration have opposed the law and are seeking its repeal.
Menor issued his own study last week, based on uncapped diesel fuel prices, indicating that consumers could have paid up to 73 cents more a gallon had the regulations not been in effect.
In a letter to House lawmakers, department Director Ted Liu said his agency's analysis was reviewed by three "well-respected" local economists and determined to be sound.
Caldwell (D, Manoa) said the department's study confirmed some of his suspicions, but he is hopeful the analysis can be vetted by the Legislature.
"While I don't know exactly what the cost is to the consumer, I do believe there has been a cost, not a savings," Caldwell (D, Manoa) said.
"In my mind, I would love for us to sit down with these economists and listen to them and how they see it," he added. "I know you can have competing economists saying different things, but we should listen to the experts in our community."
The price caps have risen 11 cents in the past two weeks, reflecting an increase in crude-oil prices stemming from political tension in key oil-producing regions.
Some calm was brought to the world's jittery energy markets amid expectations that Iran's oil output would not be affected by the U.N. nuclear watchdog's meeting on Tehran's nuclear ambitions. Also yesterday, oil ministers suggested that the Organization of Petroleum Exporting Countries will keep output levels intact at its meeting later this week.
By Monday, if wholesalers charge up to the maximum allowed and dealers add a markup of 16 cents, the price for regular gasoline is forecast to range from $2.77 a gallon on Oahu to $3.13 on Lanai.
Yesterday's statewide average for regular unleaded was $2.70 a gallon, 40 cents higher than the national average, according to AAA's Fuel Gauge Report.
The Associated Press contributed to this report.