Anderson proposes state-run fuel authority
By Mike Leidemann
Advertiser Transportation Writer
Democratic gubernatorial candidate D.G. "Andy" Anderson wants the state to set up an independent authority that buys gasoline and diesel fuel on the world market and sells it to Hawai'i residents at Mainland prices.
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The proposed nonprofit Hawai'i Fuel Authority would search out the best prices for refined fuel and distribute it here through independent gasoline stations at prices far below that offered by the state's two leading refiners and distributors, Chevron Hawai'i and Tesoro Hawai'i, Anderson said.
D.G. "Andy" Anderson accuses fuel refiners of abuse.
The authority would cost about $22 million to set up through state-backed revenue bonds and save Hawai'i motorists an estimated $228 million a year in fuel costs, Anderson said.
The proposal drew a critical response from Tesoro and Chevron officials.
"Our first thought is that government should not be involved in business and shouldn't be competing against private business," said Eric Lee, Tesoro's vice president and general manager for retail operations.
"It doesn't appear the proposal takes into account all the costs of doing this type of business."
Chevron spokesman Albert Chee said the figures in Anderson's proposal do not add up to the substantial savings that he projects.
"If you take their figures for storing and delivering the fuel, 23 cents, add 56 cents in taxes we pay and then figure in the average spot market price of gasoline last month, about 80 cents, it all adds up to about $1.59," or about what consumers have been paying at the pumps in recent weeks, Chee said.
Anderson insisted that the plan was viable.
"It is an opportunity for economic recovery like nothing I have ever seen in all of my years in government or 40 years of private business," Anderson said.
"That is $2.5 billion over 10 years. I'm willing to gamble my entire gubernatorial campaign on the value of this."
Accusing Chevron and Tesoro of "abuse, abuse and abuse," Anderson blamed the companies for maintaining a monopoly that consistently charges Hawai'i drivers about 40 cents per gallon more for gasoline than their Mainland counterparts.
Establishing independent sources and outlets for gasoline and diesel fuel would force the companies to sell their fuel at more competitive prices, he said.
Anderson said other options, like putting a legislative cap on fuel costs or bringing a new lawsuit against the companies, would take years to accomplish and might ultimately end in failure.
"My approach is a business one," said Anderson, a former Republican now running as a Democrat. "We want to compete fairly and on the open market."
Eventually, Chevron and Tesoro would offer to sell the authority refined fuel at substantially lower costs; "I'm sure of it," he said.
A similar group already exists here to help airlines save fuel costs, said Anderson.
However, the Hawai'i Fueling Facilities Corp. only owns storage and distribution facilities used for jet fuel sold by Chevron, Tesoro and other sources; the group never owns the fuel in the system.
"It would take quite a bit of study to see if it's feasible to bring in refined gasoline here," said John Thatcher, head of the airline group.
