Gas companies opening up books

Oil industry officials hope analysts will not cherry-pick the data to draw conclusions

As Hawaii's gasoline prices top the nation once again, isle motorists can soon expect to get some information on what goes into the cost of a gallon of gas.

The first weekly pricing reports from the oil industry to the Public Utilities Commission are due this week. The commission is required to make information available within 14 days but has not yet determined what information will be posted online.

Reports are aimed at letting the public decide whether it believes oil companies are setting prices excessively high.

With so much information being submitted, some say the usefulness of the data will depend on who analyzes it and how it is presented. "It'll be interesting to see what -- academically and intellectually -- people do with this material," said Alec McBarnet, president of Maui Oil Co.

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Beginning this week, the oil industry is scheduled to start turning over information on prices, inventory, imports, exports and a host of other operational costs to the Public Utilities Commission, under "transparency" provisions pushed by the state Legislature.

But it still could be a while before motorists see what goes into Hawaii's gasoline prices, which have once again climbed to the highest in the country.

The deadline for the first weekly reports is Wednesday, and the PUC is required by law to make information available to the public within 14 days.

Exactly what information will be released has not yet been determined.

"We first must review the reports that are filed starting Aug. 22 and look for consistency and completeness, among other things," Lisa Kikuta, the PUC's chief researcher, said in an e-mail. "As we analyze the reports, we will determine what can and should be published on the commission's Web site."

The reporting requirements were passed in 2006 -- as part of the law that rescinded the state's one-of-a-kind wholesale price caps -- and lawmakers provided full funding for the Petroleum Industry Monitoring, Analysis and Reporting program this past session.

Oil industry participants are required to report on a variety of operational factors, such as the volume of fuel imported and exported, the costs of the fuel at various points in the supply chain and their weekly gross margins.

Members also must report the data for as many as 18 different types of products, ranging from conventional gasoline and diesel to jet fuel, kerosene and propane.

The 15-page reporting form, a copy of which was obtained by the Star-Bulletin, comes with 26 pages of instructions. Actual submissions are likely to include dozens more pages of documentation.

"We'll be submitting, this month, 214 individual forms," said Alec McBarnet, president of Maui Oil Co., a jobber, or middleman, that buys gasoline from refiners and sells it to service stations.

Whether the information is helpful depends on who analyzes it and how it is presented, he said.

"It'll be interesting to see what -- academically and intellectually -- people do with this material," McBarnet said.

The PUC has broad powers to determine what information is released to the public, but also is charged with ensuring that proprietary, competitive information is kept confidential.

Lawmakers want the public to see what goes into the cost of gasoline, letting them form their own opinions as to whether they believe oil companies are setting excessively high prices, as critics claim.

The reporting comes as Hawaii's gasoline has again become the priciest in the nation.

The statewide average for regular, self-serve unleaded was $3.24 a gallon on Friday, 14 cents more than the next-highest state, Alaska, according to AAA's Fuel Gauge Report. The national average was $2.76.

Hawaii's statewide average dropped about a dime, as expected, when a general excise tax exemption on ethanol-blended fuel was restored July 1. Since then the average has crept downward by about 5 cents.

However, the national average was at $3.05 a gallon on July 16 and has fallen much faster, a trend critics have pointed to as evidence that Hawaii's prices are set artificially high for the sake of profits.

Oil companies say taxes, Hawaii's isolation, limited competition and other factors contribute to the isles' high prices.

The reports will speak for themselves, McBarnet said.

"We've supported transparency because I think it's one way to show there's nothing out there to be embarrassed about."

Hawaii's two oil refiners, Chevron and Tesoro, say they will be in compliance with the reporting requirements, and hope that whatever is released publicly paints a complete picture of the industry.

"We believe the PUC is doing a really good job of working with the situation under very complicated circumstances," said Chevron spokesman Albert Chee.

McBarnet said he worries that some might "cherry-pick" certain data and use it to point fingers and place blame.

Nathan Hokama, a spokesman for Tesoro in Hawaii, agreed.

"Certainly someone could take a look at a particular figure or piece of data and come to a certain conclusion when they may not be taking into account the entire business in terms of all the different products and all the different aspects of running the company," Hokama said. "Even if they had all the data that they needed, who would be the arbiter of what is acceptable profitability for the company, whether it's the oil industry or any other industry?"