Increase information to monitor gas prices
A report indicates that more pricing information is needed to prevent fixing of gas prices in Hawaii.
Gasoline price caps were lifted last year, but questions remain about whether some suppliers and middlemen used the suspension to increase profit margins. A report by a Virginia consulting firm indicates that more pricing information needs to be required of the petroleum industry to assure that prices are not being fixed in the absence of robust competition.
The caps took effect in August 2005 on the eve of Hurricanes Katrina and Rita and were suspended in May 2006 after a public outcry. The gas-cap law remains on the books, and a report by IFC Consulting suggests the legislation might be necessary "as a possible control mechanism" if monitoring by the Public Utilities Commission "does not achieve desired results."
The report does not specify how much suppliers' profit margins increased after the caps were lifted, only that many of those did increase. Profits by some jobbers -- middlemen who buy gas from refiners and sell it to retail stations -- increased profit margins by about 10 cents a gallon, the report says. Gas stations were not subject to the price caps.
Senate Energy Committee Chairman Ron Menor, author of the gas-cap legislation, wants the industry to provide detailed information about all wholesale transactions. Some information is provided to the PUC but redacted on the agency's Web site to keep proprietary information confidential.
The consultant's report says the some "desirable data," such as distributors' business expenses, is not available. Menor says he will introduce a bill in the upcoming Legislature to achieve "true transparency." Meanwhile, the price of regular, unleaded gas in Hawaii has increased to an average of $3.47 a gallon, 50 cents higher than the national average and 21 cents more than California, the next-highest state.
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