Gas cap rising to 5-month high
Pump prices, forecast to hit $3.08 on Oahu, would be $2.86 under a proposed revision
Wholesale price caps on gasoline are going up 14 cents next week.
New caps, published yesterday by the state Public Utilities Commission, are at their highest points since October, when Hurricane Rita ravaged Gulf Coast oil facilities still recovering from Hurricane Katrina.
By next week, if wholesalers charged up to the maximum allowed, prices for regular are forecast to range from $3.08 a gallon on Oahu to $3.44 on Lanai, while the statewide average could go to $3.14.
Yesterday's statewide average for regular was $2.95 a gallon, 35 to 36 cents* higher than the national average reported by AAA's Fuel Gauge Report.
Hawaii's price spikes reflect increases in average spot prices in the Gulf Coast, New York and Los Angeles -- the three mainland markets used to determine the base-line price for the caps.
A proposal advancing in the Legislature would add Singapore to the three markets and throw out the highest of the four market averages setting the price caps each week.
Using that revised formula, price caps for next week would be about 12 cents lower. Factoring in other proposed changes, retail prices for regular gas would range from $2.86 on Oahu to $3.23 on Lanai, while the statewide average would be about $2.92, according to Star-Bulletin calculations.
The revised formula is part of a proposal introduced by Senate Consumer Protection Chairman Ron Menor (D, Mililani). Under that proposal, price caps would be suspended, but the Public Utilities Commission would continue calculating hypothetical caps using the revised formula. Price controls would be automatically put in place for two weeks if the actual wholesale prices rose above the hypothetical caps for two straight weeks.
House leaders have balked at the proposal, saying it could be too burdensome.
The issue is expected to go to conference committee, where both sides will try to reach a compromise. If none is reached, the current law would remain in place.
Star-Bulletin estimates include taxes and assume wholesalers charge up to the maximum allowed. Projections also include an assume dealer markup of 16 cents, although such charges vary and are not governed by the price cap.
CORRECTION
Sunday, April 9, 2006
» Hawaii's statewide average for regular gasoline is about 35 to 36 cents above the national average as reported by AAA's Fuel Gauge Report. A Page A4 article Thursday incorrectly overstated the average by 10 cents.
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