Gas prices set to drop from year's high mark

After reaching their highest points of the year in the past few weeks, wholesale price caps on gasoline are expected to go down next week.

The price caps are to be set tomorrow by the Public Utilities Commission. Preliminary calculations by the Star-Bulletin indicate a drop of about 3 cents.

Any decline would stop the trend of increases since the week of Feb. 27. Price caps have gone up 40 cents since then, and currently are at their highest point of 2006.

By Monday, prices are expected to range from $2.90 a gallon for regular on Oahu to $3.27 on Lanai. The statewide average could go to about $2.96 a gallon. Projections assume wholesalers charge up to the maximum allowed and dealers add a markup of 16 cents.

Yesterday's statewide average for regular was $2.90 a gallon, 40 cents higher than the national average, according to AAA's Fuel Gauge Report.

Meanwhile, lawmakers face deadlines in the next few weeks to complete work on two separate proposals to suspend the state's one-of-a-kind gasoline price controls.

The House has proposed suspending the cap and ultimately repealing it in favor of measures aimed at providing more oversight of the oil industry's pricing practices. Critics say the transparency measures proposed by the House are too protective of the industry and would give consumers little knowledge of pricing.

Senate lawmakers have advanced a proposal introduced late last week by Consumer Protection Chairman Ron Menor that proposes to suspend the gas cap but keep it on the books as a "safeguard." The Public Utilities Commission would continue to calculate price caps under a revised formula, and if prices rose above the hypothetical caps for two straight weeks, the regulations would be put back in place for two weeks.

Menor (D, Mililani) said he offered his bill as a "compromise" to House leaders, who he said sent a strong message of not wanting to keep the price caps alive.

Both sides have until April 13 to complete work on bills before heading into joint House-Senate conference committees.