Isle gas prices to climb 14 cents
House lawmakers propose eliminating the caps immediately
With wholesale gas price caps going up 14 cents next week, House lawmakers have taken a stronger stance against the regulations.
The House has introduced a proposal to immediately repeal the price caps and in their place adopt measures aimed at forcing oil companies to make public more of their pricing information.
House members previously had sought to impose the transparency measures first and then see if they worked before completely striking the price controls from the books.
The Senate's main backer of the caps, Consumer Protection Chairman Ron Menor, said he would study the latest proposal from the House, but also asked his counterparts to keep an open mind toward adopting revisions to the law that he has proposed.
Both sides seemed far apart yesterday as the panel of seven House members and four senators began final negotiations over the fate of the nation's only price controls on gasoline.
"It appears that the significant difference between the House and Senate position is with respect to whether we should have some form of price regulation in effect," said Menor (D, Mililani).
The Senate has advanced a proposal by Menor to indefinitely suspend the caps but have the Public Utilities Commission continue calculating hypothetical price ceilings under a revised formula. If prices rose above the hypothetical wholesale caps for two consecutive weeks, the price controls would be reinstated for two straight weeks.
Menor said his proposal gives oil companies the freedom to set prices at whatever level they want but also provides a safeguard against having costs going too high.
"We just think that having this sort of safeguard mechanism is fair, balanced and reasonable," Menor said.
House members said they continue to have concerns on the Senate proposal.
"It is pretty difficult to implement something as complicated as this," said House Energy Chairwoman Hermina Morita (D, Hanalei-Kapaa).
Menor said he would be open to extending the two-week threshold, and House Consumer Protection Chairman Bob Herkes (D, Volcano-Kainalu) said members would consider all options.
If lawmakers do not reach a compromise by April 28, the current law would remain in effect.
Both sides appeared to have some agreement on transparency measures, with the House accepting the Senate proposal to get more information to the public.
Meanwhile, after a 27-cent increase over the past two weeks, wholesale price caps for next week are going up 14 cents.
Retail prices are projected to range from $3.36 a gallon for regular on Oahu to $3.72 on Lanai, according to Star-Bulletin calculations.
Yesterday's statewide average was $3.12 a gallon, 32 cents more than the national average, according to AAA's Fuel Gauge Report.
Crude oil continues to set record highs, topping out yesterday above $72 a barrel.
Hawaii's gas caps are tied to three mainland markets -- the Gulf Coast, New York and Los Angeles -- where spot prices track closely to crude oil costs.
The revised price cap formula included in Menor's proposal would add Singapore to those benchmark markets and discard the highest of the four when setting the weekly base-line price. The new formula also would reduce some of the fixed costs that are added to the base line in setting the caps.
Under that formula, price caps for next week would be about 23 cents cheaper, mostly because of the addition of Singapore.