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The Honolulu Advertiser
Posted on: Tuesday, April 18, 2006

Gas price set to rise for third week in row

Reader poll: Are rising gas prices making you change your driving habits?

By Sean Hao
Advertiser Staff Writer

Get ready for more pain at the pump.

With oil prices surging past $70 a barrel yesterday, Hawai'i drivers can expect another double-digit increase in gasoline costs next week, the third in a row.

The state-mandated wholesale gas price cap will likely rise about 12 cents on Monday. That's on top of a 13-cent increase yesterday and a 14-cent boost the week before that.

A nearly 40-cent per gallon price hike in three weeks could spell doom for Hawai'i's gas cap. Consumer frustration with rising gas prices is putting pressure on lawmakers to suspend the cap.

"It doesn't seem to have made any difference gas is still going up," said Marilyn Harker, a state Health Department employee living on Kaua'i, where regular gas sold for $3.41 a gallon yesterday.

Most Hawai'i residents appear to agree. A recent poll by OmniTrak Group Inc. found that 68 percent of 700 Hawai'i adults surveyed said the gas cap is not working for consumers.

House Majority Leader Marcus Oshiro, D-39th (Wahiawa), said higher gas prices make it more difficult to defend the cap.

Both the House and Senate are pushing for a suspension of the law in favor of stepped-up oil industry oversight. However, the Senate also wants to create a mechanism that would bring the cap back if prices exceed a certain level.

Lawmakers are expected to decide the issue in a conference committee before the May 4 end of the legislative session. The price cap will remain in effect if the Legislature takes no action.

Price cap architect Sen. Ron Menor, D-17th (Mililani, Waipi'o), acknowledged that higher prices are not helping his cause. "The fact that gasoline prices are increasing," he said, "may make it more difficult to convince my legislative colleagues that we need to maintain some price regulation over gas prices." But Menor said he will keep trying.

Already the price for regular in Honolulu has risen 29 cents during the past month to an average of $3.01 a gallon yesterday, according to the AAA Daily Fuel Gauge Report. Those prices don't include the full effect of a 13-cent increase in Hawai'i's price cap effective yesterday since it can take a couple days for an increase in the cap to be reflected in prices at the pump.

Hawai'i's gas cap regulates the wholesale price. There is no restriction on retail prices.

Gasoline prices are on the rise nationwide amid concerns about tight supplies and uncertainty in the Middle East. That translates into higher Hawai'i prices in part because of the state's one-of-a-kind price cap law, which sets a weekly price ceiling based on wholesale prices during a five-day period in three Mainland markets. After the first four days of market data, the cap for O'ahu was poised to rise Monday to nearly $2.56 a gallon for regular, excluding taxes and dealer markup.

That virtually assures that O'ahu drivers soon will be paying more than $3 a gallon for gasoline.

"You just have to deal with it because it's a diminishing natural resource," said Ian Gomez, a car salesman in Waipahu. "It's not a renewable resource."

Gomez opposes the gas cap, saying the free market should determine what prices should be.

In Honolulu yesterday prices ranged from about $2.82 a gallon to more than $3 for regular.

The disparity in gasoline prices makes it even more important to shop around, said Mililani caregiver Katherine Kupukaa, who said she's now forced to buy gasoline in Honolulu where it's cheaper. Since the caps took effect in September prices have gone up faster than they have fallen, Kupukaa added.

"When the (cap) prices go down, the prices at the gas stations never come down," Kupukaa said. "But when it comes time to raise the price, right away, they do it."

Reach Sean Hao at shao@honoluluadvertiser.com.