"My concern is that if consumers act based on fear or on unfounded kinds of allegations, the problems could be a self-fulfilling prophecy."
Senate Consumer Protection chairman
of gas feared with
each price-cap rise
A worst case would bring
long lines and shortages,
according to one isle economist
The high price of gasoline already has changed the driving habits of Jordan Dawson.
Filling up his Toyota sedan with regular unleaded at $2.80 a gallon last week, the 20-year-old from Kalihi says driving for him and his friends has become something of a luxury.
"We hardly go anyplace now," Dawson said. "Just to save gas we hardly go anywhere -- usually straight to work, school, back home. That's about it. Mostly we just stay in."
How the state's gasoline price-cap law might affect his or anyone else's driving habits isn't yet known.
Exactly what will happen to prices at the pump won't be known until the law takes effect Thursday.
Some analysts have predicted that costs could rise above current levels, which already have reached record highs.
If he knew for sure that the cost of gas were going to go up, Dawson says he wouldn't hesitate to fill up beforehand.
"I would," he said. "I'd even bring extra gas cans if I could."
Dawson is too young to remember the result of federal price controls attempted in the 1970s.
But while long lines at the pump and shortages are considered a worst-case scenario for Hawaii, such results can't be ruled out, according to one analyst.
As people become more educated about the law, there is the chance that they will start using the information to their advantage, said Paul Brewbaker, chief economist for Bank of Hawaii.
For example, if people begin to check regularly the weekly maximum price for wholesale gas when it is posted online by the Public Utilities Commission, they might react accordingly if the baseline price goes up.
"My guess is there's going to be a period of learning where consumers try to gain in the system -- try to figure out if there's a way to use the pricing cap information in one week to either bring forward or to defer their gasoline purchases in the following week," Brewbaker said.
"There is this risk that the initial confusion -- and as a result, the learning process that follows -- will lead to pathological gaining strategies that either disrupt people's lives or disrupt the stream of production and distribution."
Such pathological strategies could mean rushing out to get gas before the new, potentially higher prices start.
"That's an extreme possibility, but you can't rule it out," Brewbaker said.
So where would this lead people?
Probably Costco, Brewbaker said.
Regular unleaded at the wholesale club's Iwilei store on Friday was $2.55 a gallon, 22 cents cheaper than the average reported in Honolulu by AAA's Fuel Gauge Report: a record $2.77.
The statewide average was a record $2.86 per gallon on Friday, 26 cents above the national average, according to the auto club.
Including taxes and assuming a 12-cent-per-gallon markup traditionally charged by dealers, the cost of regular unleaded on Oahu could rise to $2.87 a gallon if oil companies charge the maximum allowed under the price-cap law.
So far, demand at Costco has been fairly consistent, said Robert Loomis, general manager of the Iwilei store.
"Our lines are always fairly long because we typically have one of the best prices," Loomis said. "I wouldn't say that it's any more than normal."
He said he doesn't anticipate any shortages caused by a run on gas as Thursday's implementation date for the price cap approaches.
The state's two major wholesalers, Chevron USA Inc. and Tesoro Hawaii Corp., have not said what they plan to charge for wholesale.
Although they remain staunchly opposed to price caps, the oil companies have said they will continue to supply gasoline and they do not anticipate any immediate disruptions come Thursday.
Albert Chee, a Chevron spokesman in Hawaii, said the company would stay in the islands but was not sure what effect the price caps would have, because such laws have never been enacted before at a state level.
Tesoro, meanwhile, said it had "ample supply" in Hawaii distribution and that its local refinery was operating at full capacity, indicating it didn't expect to run low.
Senate Consumer Protection Chairman Ron Menor, one of the chief authors of the price-cap law, said he doesn't expect any shortages, either.
"My concern is that if consumers act based on fear or on unfounded kinds of allegations, the problems could be a self-fulfilling prophecy," he said. "But, again, I think the gas price cap should be given an opportunity to work, and I'm confident that it will not result in the kinds of problems that the oil companies have been alleging will result from the law."
Gov. Linda Lingle, who opposes price caps, says the bottom line is that nobody knows exactly what will happen once the law takes effect.
"This has never been tried in a state, on a state basis, in America," she said. "I suppose if it works it would be a first in the history of the world."
One thing that motorists such as Dawson and Mabel Hunkin, 36, of Makiki, know is that gas prices will continue to affect their daily lives.
As she finished pumping $50 worth of $2.90-a-gallon mid-grade gasoline -- an amount that "doesn't even come close" to filling the tank of her Ford Explorer -- Hunkin was pragmatic about how she would deal with any rise in fuel prices.
"I think what I would have to do is probably sacrifice going to Jamba Juice," she said, "or drinking coffee at Starbucks."
The Associated Press contributed to this report.