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The Honolulu Advertiser
Posted on: Wednesday, April 24, 2002

Maui gas dealers skeptical about price cap plan

 •  2004 cap on gas prices proposed

By Timothy Hurley
Advertiser Maui County Bureau

WAILUKU, Maui — State Attorney General Earl Anzai traveled yesterday to the Neighbor Islands to drum up support for the governor's proposal to impose a price cap on gasoline prices.

Armed with graphs, charts and data obtained during the state's thwarted attempt to sue the oil companies for price fixing, Anzai met with reporters on Maui and Kaua'i to make a case for legislative action this session. He'll visit the Big Island tomorrow.

On Maui, where the cheapest gas is about $1.88 per gallon, Anzai faced skeptical service-station dealers.

"There's no question that we pay the highest price in the nation and shouldn't. But is the answer more regulation?'' said Alvin Makimoto, owner of Uptown Service Inc. in Wailuku.

Paul Hanada, owner of Ilima and Aloha Shell stations in Kahului, said the cap on retail prices doesn't take into consideration other fixed costs.

"Lower gas prices helps my business," he said. "But not to the point where it controls me. I'm not a competitor if they control me. I hate it when the state gets involved."

Both dealers said the state shouldn't rush into any legislation before the full effect is known.

But Anzai replied: "What should we do? Sit back and let the oil companies charge whatever they want?"

Anzai, who said he noted a 30-cent difference yesterday between the price of unleaded gas on O'ahu and on Maui, said there is no reason gas prices should be any higher in Hawai'i than they are on the West Coast, and no more than 8 cents higher on the Neighbor Islands than on O'ahu.

Hawai'i and the West Coast are the same distance from the crude oil in Alaska, he said, and with capitalized refineries in Hawai'i, it costs as much or less to make gasoline here.

"What explains the difference?'' he said. "The difference is high profits."

Anzai said the oil companies have been saying gasoline is in short supply, but the reality is there's a substantial surplus that is being exported from Hawai'i to lower-price markets.

He described Hawai'i's gasoline market as "profoundly uncompetitive,'' with companies reaping "staggering'' profits.

Reach Timothy Hurley at (808) 244-4880 or thurley@honoluluadvertiser.com

Correction: Maui service station dealers were quoted who were skeptical about a plan to cap gasoline prices. The headline was incorrect in a previous version of this story.