Oahu gas middleman
petitions to increase cap

At least one Oahu jobber is preparing a petition to the Public Utilities Commission asking for a slight increase to the state's gasoline price caps so it can continue making deliveries to smaller service stations.

The adjustment would allow B&E Petroleum to resume making deliveries to Priam's Automotive Service and Repair, a small volume gas retailer that the PUC said was in danger of losing supply because of the price caps.

B&E stopped delivering gas to Priam's once the caps took effect Sept. 1, saying it could not afford to continue supplying the small Pauoa station.

Chad Kobayashi, general manager of B&E, said he was unaware until recently that he could ask the PUC to change the formula.

"We weren't as readily prepared for the situation as maybe others were," Kobayashi said. "It's really kind of a new, unexplained law to a lot of the jobbers. Everybody's kind of confused."

Jobbers are middlemen who buy gasoline at wholesale cost from refiners and resell it at that cost to service stations like Priam's.

The "gas cap" law each week sets a maximum price at which wholesale gas can be sold. If refiners charge up to the cap, jobbers say they are unable to recoup costs of delivering to smaller, remote locations because they cannot charge above the price cap.

"We're asking for a small adjustment of the gas price just so that we are able to make up the hauling difference," Kobayashi said. "As long as we can recoup most of our costs, we don't mind delivering to (Priam's) because they've been a long-time customer."

The PUC already has increased the price caps for Kauai, after one of the island's two jobbers asked for the adjustment.

Lawmakers who support the price caps have urged the commission to examine whether there should be different caps at each step in the supply chain to allow middlemen to recoup delivery costs.

The commission has said it is working within the parameters of the law and adjusting to situations as they arise.

Only manufacturers, wholesalers or jobbers may petition for a revision. Individual stations at risk of losing gas would have to ask their supplier to petition the PUC.

Kobayashi said he decided to file the petition on behalf of Priam's because owners Priam and Sharon Stewart have been good customers for more than a decade.

Stewart said she's appreciative of the effort. The station stopped selling gas last week, but Stewart said she is working with B&E and other wholesalers to try and negotiate a deal that will have the pumps running again soon.

"It's day to day," she said. "There's a lot of different fronts that are working on our behalf right now."

GAS CAP HELP How to contact the state about Hawaii's gas cap law: Public Utilities Commission www.hawaii.gov/budget/puc/gaspricecaps Commerce and Consumer Affairs www.gascap.hawaii.gov Hotlines for consumers: 586-2769, on Oahu; (800) 830-4295, toll-free, from neighbor islands. Business, Economic Development & Tourism www.hawaii.gov/dbedt/ert/gasoline/gasoline.html Hotline for owners and operators of gas stations: 586-2752 E-mail: gasoline@dbedt.hawaii.gov AAA Fuel Gauge Report: www.fuelgaugereport.com