Gasoline price cap on track, PUC says
By Sean Hao
Advertiser Staff Writer
The state Public Utilities Commission confirmed yesterday that the state is prepared to implement the nation's only gasoline price cap on Sept. 1.
Feb. 2-April 15: PUC conducts investigation into price-cap formula. May: Statewide public meetings on proposed price-cap formula. August: PUC final order establishing formula. Sept. 1: Price caps take effect. Source: State Public Utilities Commission.
"At this point I'm fairly confident we can have the price caps up," PUC Chairman Carlito Caliboso told lawmakers during an informational briefing yesterday. "As I sit here today, I can tell you that I'm not planning on asking for any extensions."
Time frame for gas cap rollout
That means, barring any legal issues, the state's controversial gasoline price cap law will take effect as scheduled.
Ron Menor, D-17th (Mililani, Waipi'o), chairman of the Senate Consumer Protection and Housing Committee, hosted the briefing. Menor said lawmakers wanted assurances from the PUC that the caps would be implemented on time.
Menor, an architect of the price cap law passed last year, also said he wanted to send a message to the oil industry that price caps were coming, whether they liked them or not.
The new law uses a complex formula to cap the wholesale price of gasoline on O'ahu and Neighbor Islands. The price-cap formula will be based on spot prices in several markets across the nation, but does not set a ceiling on what retailers can charge. The PUC is investigating which benchmark and margins make sense in establishing ceilings on gasoline and diesel fuels.
Critics of the price cap contend the law could lead to higher retail prices or shortages.
Yesterday, the average cost of a gallon of self-serve regular on O'ahu was $2.32. Under the planned price cap law, the price might have been cut to $2.24, if retailers pass on the saving from the lower wholesale price, and assuming a 12-cent-per-gallon retail margin.
Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.
