Oil company profits are not ‘excessive’ in Hawaii
Ira Rohter's recent comments against oil companies in Hawaii (Gathering Place
, Star-Bulletin, Sept. 21) reflects a poor understanding of economics and the marketplace, and risks misleading your readers.
Rohter alleges that "Big Oil" has "invested" large campaign contributions and lobbying expenditures, leading to suspension of Hawaii's gasoline price cap and "excessive profits" for the oil companies. He argues that public financing of political campaigns could have prevented Hawaii's consumers from being "screwed." Nonsense.
Our island state is a small, isolated market, situated farther from a continent than any other place in the world. That is why we pay more for gas, just as we pay more for groceries, appliances, furniture and just about every imported product, not to mention paying among the highest electricity rates and home prices.
If oil company profits in Hawaii were "excessive," as Rohter alleges, other oil companies would be entering the market to claim their share. Instead, the opposite has happened. In recent times, one local gasoline retailer went bankrupt and two others left the market. The truth is, artificial price controls ultimately hurt consumers by disrupting the market, reducing the supply of gas and leading to volatile gas prices, as we have all experienced firsthand under the gas cap experiment.
Rohter lumps Aloha Petroleum in with Chevron and Tesoro under the title of "Big Oil." If he doesn't know better, he should. Chevron and Tesoro are Fortune 500 companies that refine virtually all the gasoline sold in Hawaii. Aloha Petroleum is a small, Hawaii-based company that purchases gasoline to resell through its gas stations and to other retailers. Aloha Petroleum is not a refiner -- it is a customer of the refiners, with a completely different business model.
These differences notwithstanding, Rohter lumps together the lobbying expenditures and campaign contributions of Chevron, Tesoro and Aloha Petroleum, links these expenditures to repeal of the gas cap and then suggests that this somehow supports public financing of campaigns.
While Aloha Petroleum takes no position on public campaign financing, we think the discussion should be honest. Moreover, to claim that the oil industry in Hawaii is somehow guilty of influence-peddling simply distorts the facts. The total of all campaign donations and lobbying expenses reported during the past three years in Hawaii was more than $23 million, dwarfing the sum attributed by Rohter to the three oil companies.
Lobbying expenses are primarily made up of salaries, fees and expenses of the people who advocate positions to public officials -- a right of every person in our country. Public financing of elections will have absolutely no effect on lobbying, and existing laws already place strict limits on campaign contributions.
But even if Rohter's argument were not so seriously flawed, it would be unfair to include Aloha Petroleum in with "Big Oil" for the size reason I mentioned earlier. Assuming his figures on campaign expenditures and lobbying expenses are correct, Aloha Petroleum accounted for less than 7.5 percent of the total spent by the three oil companies during the last three years.
So much for labeling Aloha Petroleum as "Big Oil."
Bob Maynard is president and CEO of Aloha Petroleum, Ltd.