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The Honolulu Advertiser
Posted on: Thursday, March 2, 2006

Gas cap to face some tinkering at Capitol

By Sean Hao and Dan Nakaso
Advertiser Staff Writers

The state House and Senate each want to change the gas cap but in radically different ways.

Senators pushed ahead yesterday with plans to reduce the cap by about 16 cents a gallon, while House members are moving forward with an outright repeal.

Ultimately the Senate and House will have to hammer out a compromise before the end of the current legislative session on May 4. If they fail to reach an agreement, the wholesale gas cap will remain as is.

"The amendments we are proposing will generate additional savings to consumers," said Sen. Ron Menor, D-17th (Mililani, Waipi'o), an architect of the price cap law. "I'm hoping that the House members will reconsider their position ... and eventually agree with us."

The House supports suspending the cap on July 1 and repealing it 18 months later. In place of the cap the House would require stepped-up reporting by the oil industry. House Majority Leader Marcus Oshiro, D-39th (Wahiawa), said the added monitoring of oil companies should lead to fair gas prices and if it doesn't, the cap can be brought back.

The gas cap law, the only one of its kind in the nation, ties wholesale prices in Hawai'i to those on the Mainland. A state study released last month showed that retail gasoline prices, which are not restricted, haven't fallen as quickly as wholesale prices. The cap also hasn't restrained oil company profits. Tesoro Petroleum Corp. reported it had its most profitable quarter in Hawai'i in at least three years under the price caps.

Many consumers agree that the cap needs to be repealed or changed, and lawmakers are listening.

Amy Yuen and her husband, Randall, would both prefer that the Legislature kill the gas cap. Both drive Mustangs, "so we've been hit really hard by gas prices," she said yesterday.

"I'm just totally upset at how the gas prices fluctuate from week to week," she said. "Go back to the way it used to be. We seemed to have more stability back before."

Lance Fujioka, who teaches at Mililani Uka Elementary, said he'd "definitely rather have lower prices."

Instead of driving his Ford Aerostar van to school, Fujioka now takes his bicycle. "I try to not drive as much these days because of the gas prices," he said.

The Senate proposal, Senate Bill 2911, passed through a committee yesterday and now goes to the full Senate for a vote.

The Senate's move comes one day after a House committee passed its repeal legislation.

Reach Sean Hao at shao@honoluluadvertiser.com and Dan Nakaso at dnakaso@honoluluadvertiser.com.