Gas-related bills await gov's OK
Measures propose oil industry oversight and excise tax relief
As gasoline prices inch upward and surpass highs set last summer, Gov. Linda Lingle says she still is reviewing two key pieces of legislation aimed at helping consumers at the pump.
Lingle has until June 25 to notify the Legislature of any bills she intends to veto.
The gasoline-related bills include House Bill 1757, which would forgive the general excise tax on ethanol-blended fuels; and Senate Bill 990, which would fully fund oversight and monitoring of the petroleum industry.
Lingle has supported both measures in the past, but said some gasoline dealers on Kauai have raised concerns about provisions of the oversight and reporting requirements in SB 990.
"There were some issues that were raised to me," Lingle said without going into specifics. "We told them we'll look, but they know also that we've been supporting this openness.
"We use this period to give everybody a chance, who wants to, to come in and express themselves."
Yesterday's statewide average for regular unleaded was $3.41 a gallon, a penny higher than a year ago, according to AAA's Fuel Gauge Report.
Analysts say the GET exemption, which if signed into law would take effect July 1, would drop prices about 11 to 14 cents a gallon.
But since May 3, when the Legislature gave final approval to the exemption, prices have gone up 18 cents.
Industry officials say the increase has been tied to rising crude oil prices in Asia, where much of Hawaii's stock comes from.
In Indonesia, a key supplier for Hawaii, crude prices averaged $68.83 and $69.24 a barrel in each of the last two weeks. Crude oil on the New York Mercantile Exchange traded between $63.15 and $66.21 in the last two weeks.
The legislation requires that the GET savings be passed on to consumers. Oil companies, along with many gasoline dealers, have pledged to do so.
But critics of the oil industry say any tax exemptions typically are eaten up by refiners, who slowly increase the wholesale costs and force dealers to pass along the increase to consumers, negating the benefit.
Oil companies say that is not true.
That's where SB 990 is expected to come into play.
Supporters say the new "transparency" requirements will allow state regulators to see what is happening. Analysts would be able to determine whether any wrongdoing was occurring and could then pass the information along for an investigation.
The Public Utilities Commission has been working with all parties to come up with detailed reporting forms and to set up the monitoring system.
"This process is taking into account that SB 990 may be signed into law shortly and that major fuel users would have to report data using the forms," Lisa Kikuta, the PUC's chief researcher, said in a recent e-mail.
The proposal in SB 990 mirrors legislation passed last year, with some additional reporting requirements and enhanced penalties for noncompliance.
This year's version of the bill also provides full funding for the state agencies to carry out the oversight. Lingle requested and received $1.2 million.
"It would provide needed funding to develop, maintain and support the petroleum-monitoring system and program," Kikuta said.