Lawmakers may delay gasoline price cap law
By Sean Hao
Advertiser Staff Writer
The nation's only gasoline price cap, which Hawai'i was set to impose on July 1, will likely be delayed at least several months for administrative purposes and could be put off for a year under a bill that advanced in the House yesterday.
A House committee agreed to postpone the gas-cap law for a year to allow for further study on how to formulate and enforce it.
"What the people need is action, not more studies and delays," said Sen. Ron Menor, D-17th (Mililani, Waipi'o), an architect of the price-cap law. But even Menor agreed that a delay for a few months may be necessary.
"I would support a delay only to the extent that a delay would be needed for the (Public Utilities Commission, which is involved in enforcing the caps) to get up to speed," Menor said. "As for a one-year delay, I have concerns about that."
Gov. Linda Lingle, who opposes gasoline price controls, predicted in her 2002 campaign for governor that the price cap would never be implemented.
Lingle's top economic aide, Ted Liu, said the administration prefers an outright repeal of price caps. Continued debate about how to set prices illustrates the folly in trying to determine the price of gasoline, said Liu, director of the Department of Business, Economic Development and Tourism.
In addition to pushing for the one-year delay, members of the House Energy and Environmental Protection Committee voted to exclude diesel gasoline from price controls and to make the state auditor responsible for determining the best formula for capping prices and for monitoring the oil industry. The bill also would require the PUC to report to the Legislature next year on the amount of money and jobs needed to enforce the price cap.
"The PUC is not set up to implement the regulation yet," said Energy and Environmental Protection Chairwoman Hermina Morita, D-14th (Hanalei, Kapa'a). And, she said, "the benchmark (for price caps) is critically important and we really need to take a close look at that."
The bill to delay the gas caps must still win approval from two other House committees, the full House and Senate and the governor.
The Legislature passed price caps in 2002 to limit local oil-industry profits in the absence of Mainland-type competition. The law included a two-year delay to allow for a report on price caps, which ultimately recommended alternatives such as stepped-up monitoring of the industry and eliminating laws that restrict where refiners can build gas stations and govern the rent that can be charged dealer-operated stations.
Oil companies operating in the state maintain gasoline prices remain high because of the cost of doing business in Hawai'i and the state's high taxes. Hawai'i's high gas prices are the result of a number of other factors, including the state's relatively small size and the cost of shipping crude oil to the middle of the Pacific Ocean.
Those opposed to price caps include the state's two refineries — ChevronTexaco and Tesoro Hawaii — and many gasoline dealers. Bill Green, owner of Kahala Shell across from Kahala Mall, said his concern is that price controls will drive the oil companies from Hawai'i to markets where there are no price caps.
"As long as there is a price cap on the books, you're going to have an accelerated withdrawal from the market by the oil companies," he said. "With a law like this on the books, they don't need to be here."
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.
