Cost of gas rises amid debate
Lawmakers weigh new ideas as fuel prices climb 41 cents in just three weeks
While lawmakers continue to argue about the fate of the gas cap law, wholesale prices are going up for a fourth straight week.
Gov. Linda Lingle said yesterday she had not yet seen a new proposal for the embattled law, but repeated her opposition to price controls.
"I think the gas cap is a bad idea," Lingle said. "It's not something I would do if I was in a position to try to have an impact on the price of gasoline."
Wholesale price caps are going up 4 cents next week, according to the latest figures posted by the Public Utilities Commission. The price ceilings have gone up 41 cents in the past three weeks.
Retail prices are projected to range from $3.40 a gallon for regular on Oahu to $3.77 on Lanai, according to Star-Bulletin calculations.
Hawaii's statewide average continues to lead the country at $3.24 a gallon, 32 cents higher than the national average and 9 cents more than the next-costliest state, California, according to yesterday's Fuel Gauge Report by AAA.
LAWMAKERS continue negotiations over the fate of the nation's only price controls on gasoline. House members said yesterday they need more time to study the latest proposal from the Senate.
The proposal was offered by Senate Consumer Protection Chairman Ron Menor to try and break a stalemate with House members who want a complete and immediate repeal of the law.
Menor (D, Mililani) backed off his previous stance of wanting to keep the caps in a form that would have them reinstated for two weeks at a time if wholesale prices remained high for an extended time.
House members still had concerns over a provision that would have the Public Utilities Commission continue to publish hypothetical price caps under a revised formula.
The current formula takes a five-day average of spot prices in the Gulf Coast, New York and Los Angeles as the base-line price for each week's caps.
The new formula would add Singapore benchmarks to the markets, and the highest of the four would be discarded each week in calculating the caps. Profit margins for refiners and wholesalers also would be reduced.
Under that formula, price caps for this week would be about 23 cents lower, while caps for next week would be about 18 cents cheaper, according to Star-Bulletin estimates.
Menor contends the hypothetical caps will give consumers a better idea of whether oil companies are setting fair prices, adding that the new formula is based on recommendations by ICF Consulting, the firm hired by the PUC to assist with implementing the law.
"We didn't pick these numbers out of thin air," he said.
House members characterized the formula as arbitrary and argued that it has not been properly vetted. House Energy Chairwoman Hermina Morita (D, Hanalei-Kapaa) said wholesale prices are likely to be consistently above the hypothetical caps, leading to unrealistic expectations by consumers.
Morita and Rep. Joe Souki (D, Waihee-Wailuku) suggested leaving any formula off the books until more pricing information can be collected and studied.
"Until we get this information, we will be merely guessing," Souki said.
Negotiations continue today. Lawmakers have until midnight tomorrow to reach a compromise or have the current law remain in place.