Lingle supports FTC oil inquiry

Hawaii will push for an investigation of price gouging

Hawaii will join other states supporting a federal investigation into allegations of gouging by oil companies that might have driven up gasoline prices following Hurricanes Katrina and Rita, Gov. Linda Lingle said yesterday.

"The Federal Trade Commission proposals are in line with what I have been advocating for Hawaii," Lingle said in a letter to House Majority Leader Marcus Oshiro. "As such, I have asked Hawaii's attorney general to join other attorneys general in sending a letter to the FTC asking that it investigate possible unlawful conduct that could be affecting the cost of fuel.

"An examination on the national level may prove instructive to the nation as well as Hawaii."

Calls for a federal investigation came after Hurricane Katrina caused major disruptions to Gulf Coast oil facilities and pushed the national retail average for regular unleaded above $3 a gallon earlier this month. After a few weeks of steady decline, fuel prices are on the rise again after further damage to the Gulf Coast from Hurricane Rita.

Last week, eight Democratic governors asked President Bush and congressional leaders to investigate possible gasoline price gouging, and the FTC said it had started an investigation into whether any illegal activity occurred.

Oshiro (D, Wahiawa-Poamoho) had urged the governor to support an investigation.

"I'm glad the attorney general is joining the other attorneys general ... but I am disappointed in (Lingle's) commentary regarding the failure of the gas law," Oshiro said yesterday.

In her letter to Oshiro, Lingle called the state's new "gas cap" a failure that has hurt consumers and businesses. She again urged the Legislature to repeal the law, which regulates wholesale gas prices.

"Doing anything less will continue to harm Hawaii's consumers and overshadow any benefits that might be derived from an FTC probe of the industry," she wrote.

Oshiro disagreed.

"If she feels that to be the case, she should stop it, put it on hold, use her (executive) powers," Oshiro said. "The gas cap is helping consumers, creating a competitive marketplace at the retail level -- as it should be."

At a news conference, Lingle said she thought it ironic that Oshiro asked her to support the same type of measure her administration introduced in the Legislature.

The proposal, which was not granted a hearing, would have established a statewide system of "watchdog" monitoring, analysis and reporting of petroleum industry data and information.

"If we had information about what the true costs -- the true expenses -- were for the refiners, what they were charging wholesale and what our families end up paying at the pump, we could make a decision in the state: Does it make sense for us to offer tax credits for someone to build a terminal in Kahului on Maui or in West Hawaii on the Big Island, because that would inject more competition into those markets," Lingle said.

Oshiro said he did not feel the governor came out strongly enough in support of such "transparency" measures.

"I've shared this with the consumer advocate ... to prove to me that this administration has gone on record and taken the lead to provide transparency from the oil companies," Oshiro said. "She has not."

A similar "watchdog" proposal introduced by majority Democrats in the House advanced in both chambers but died in conference committee, where House and Senate members try to work out differences in each other's versions of the bill.

Oshiro said transparency should be required in addition to price caps.

"They work together," he said. "You need both an inducement to provide the information, but you also need a hammer of enforcement to guarantee that prices are affected at the pumps."