CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
Tony's Gas at Dillingham Boulevard and Kaaahi Street is pictured above. A state Senate committee advanced an amended gas price-cap measure yesterday, and the chamber's top Republican criticized Democrats for playing politics.
Gas cap called
election-year ployGOP Sen. Hemmings blasts a
bill headed for a full Senate vote
A move by the Senate's money committee to modify Hawaii's one-of-a-kind gasoline price cap drew harsh criticism from the chamber's top Republican, who accused Majority Democrats of playing election year politics.
The proposal advanced yesterday by the Ways and Means Committee tweaks the price cap before it takes effect July 1 by extending it to cover all grades of gasoline, including diesel, and basing it on a national average of prices.
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It still faces final approval by the full Senate before being sent to the House, where a similar measure died in committee after lawmakers were unable to agree on changes to the 2002 law.
Sen. Fred Hemmings, R-Lanikai-Waimanalo, called the proposal a "hoax" and accused Democrats of trying to appease angry consumers with a law that may ultimately be proven unconstitutional.
"This is simply another opportunity," Hemmings said, "to try to single out one group in the free market system and demonize them for political gain in this coming election, knowing full well that if they pass this law that this will not be tested constitutionally until well after the election."
Democrats who supported the measure countered that constituents have been gouged at the pump for too long.
"Consumers in our state clearly feel that they're being ripped off," said Sen. Gary Hooser, D-Kauai-Niihau. "I hear it from my constituents every single day and they, quite frankly, would like us to do something about it.
"I think this is a good faith effort to seek a solution."
The law passed two years ago sets a maximum price for wholesale and retail regular, unleaded gasoline based on an average of prices in Los Angeles, San Francisco and the Pacific Northwest. It also caps profit margins on retail gas at 16 cents per gallon.
The amended proposal sets a maximum price for all grades of gasoline sold at the wholesale level only and removes the retail profit margin limits. It also ties the maximum price to an average of prices nationwide and exempts gasoline sold on Molokai and Lanai because of their unique markets.
Opponents argue that Hawaii's high taxes and barriers to entry, such as geography, all contribute to the high cost of gasoline in the islands.
Owners of small gas stations, mostly on neighbor islands, have testified that low profit margins would force them out of business.
Hemmings said U.S. District Judge Susan Oki Mollway supported that argument in her 2002 ruling that said the state's 1997 law placing rent caps on dealer-run gas stations was unconstitutional because it unfairly infringed on the company's ability to use its property.
That law, which was never enforced because of the legal challenge, also aimed to bring down the cost of gasoline.
Mollway said it would have had the opposite effect because oil companies likely would have raised wholesale gasoline prices to make up for reduced rental income.
The amended price cap proposal passed out of Ways and Means by a vote of 9-4, with two members absent. Majority Sens. Lorraine Inouye, D-Hilo-Honokaa, and Cal Kawamoto, D-Waipahu, sided with Hemmings and Sen. Sam Slom, R-Diamond Head-Hawaii Kai.
