Posted on: Thursday, April 25, 2002

EDITORIAL
Lawmakers should try for gasoline regulation

Lawmakers concerned about a session that appears headed for underachievement have an opportunity for an election-year reprieve for their reputations in delivering what voters want and the economy needs — price regulation of gasoline.

There are now a half-dozen proposals drifting around the Capitol, and they all deserve serious attention. It's important that lawmakers get regulation right . The result must be reasonable (instead of absurdly excessive) profits for wholesalers. There must be incentives to keep O'ahu retailers competitive and make Neighbor Island retailers more so And we must avoid unintended consequences, such as the very real possibility that poorly thought-out caps would drive the smaller players out of business.

If attention to these details must take another year, so be it — but the need is immediate.

There's no doubt at all that the "market" alone is not enough to set reasonable prices, as conclusively demonstrated by testimony emerging from the recently settled antitrust lawsuit by the state against Hawai'i wholesalers. Hawai'i wholesalers set prices high enough to make themselves the highest profits in the nation because there's nothing to impede them.

That must change.

If lawmakers need any incentive for change beyond the obvious interests of their constituents, it might be the words of Albert Chee, spokesman for Chevron Hawaii, who said proposals to cap the price of gasoline in Hawai'i provide "one more example of the deteriorating business climate in Hawai'i, and another reason why companies will not risk investing in Hawai'i."

That tired argument about too much government won't fly. What the gasoline lawsuit demonstrated was that the gasoline market here is so profitable that Mainland businesses obviously would give their eye teeth to get into it, if they could.