World oil prices overwhelm gas woes

THE ISSUE A proposal to increase transparency of gas pricing has died in legislative conference, which House conferees refused to attend.

THE soaring price of gasoline across the country has made it difficult to argue for increased oversight of Hawaii's two oil refiners. In the years leading up to the state's 2005 cap on gasoline prices, prices in Hawaii hovered about 50 cents above mainland prices. Hawaii prices now are barely 20 cents higher than the national average and the state's motorists have plenty of company suffering at the gas pump.

The price cap lasted only a few months, as prices on the mainland -- on which Hawaii's caps were based -- skyrocketed following Hurricane Katrina in 2006. They were replaced with increased oversight of the refiners by the state Public Utilities Commission. Meanwhile, gasoline prices have climbed to an average of $3.57 nationally and $3.75 in Hawaii, a difference that seems trivial.

Rep. Ron Menor, author of the gas-cap legislation, helped craft the oversight law but found the commission's reports insufficient. He proposed changes that would require oil companies to report more data on prices and their overall fuel costs in the current session. Versions of the proposal passed both chambers, but House conferees refused to meet with senators to work out differences.

"It's an international problem," Rep. Bob Herkes, the House consumer protection chairman, told the Star-Bulletin's B.J. Reyes. "I think it's a feel-good bill that isn't going to do anything for us."

He has a point. The world price of oil was $10 a barrel a decade ago. It rose to $60 in 2005 after Katrina, nears $120 today and is expected by Jeff Rubin, the World Markets CIBC chief economist, to reach $225 a barrel by 2012 as the world braces for "a period of unprecedented scarcity" of oil.