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9/22/2017 12:11:25 AM
Posted: 8/30/2005 11:04:00 AM EDT
Being born and raised in hawaii, we have always had a higher price of gas than the continental U.S., but to me, this is absurd. No free market for competition, sounds a little socialistic. I could be wrong.........

Hawaii caps gas prices
HONOLULU (AP) — In an effort to gain some control over what Hawaii motorists pay at the pump, the state Public Utilities Commission on Wednesday set the nation's first state caps on the wholesale price of gasoline.
The 2004 law authorizing the price ceilings is intended to force Hawaii's two refiners, Chevron and Tesoro, to set their wholesale prices closer to mainland rates. Proponents of the law said the refiners are taking advantage of the small, isolated market to charge exorbitant prices.

"Over a period of time, Hawaii consumers will realize savings at the pump," said state Sen. Ron Menor, the chief architect of the law. "Hawaii prices will better reflect the prices that are being charged on the mainland and the world market."

The oil companies say the state would more effectively keep down prices if it deregulated a market hobbled by rent controls and other restrictions.

"We continue to believe that this law is flawed and not in the best interest of the state," Chevron said in a statement, The Wall Street Journal reported on its Web site Wednesday night. Tesoro said its Hawaii operation believes any cap "will only serve to distort market forces and will result in long-term negative impacts to the citizens and the economy of Hawaii."

The state's Public Utilities Commission said Wednesday the wholesalers may not charge more than $2.1578 — or about $2.67 including federal, state and county fuel taxes — in Honolulu for a gallon of regular unleaded gasoline. The commission set separate price caps for other islands.

The price consumers pay at the pump will depend on the retailer markup and the state's general excise tax.

On Wednesday, the average retail prices of regular unleaded in Honolulu stood at $2.761 — a record high.

Direct comparisons between the gas cap and current wholesale prices are not possible because the oil companies do not release wholesale price data.

The ceilings will be in effect through Sept. 4. Next week, the commission will announce a new set of gas caps for Honolulu and seven other geographic zones for Sept. 5-11.

Hawaii has long endured some of the highest gasoline prices in the nation.

On Wednesday, the average statewide retail price of a gallon of regular unleaded reached a record $2.84, four cents higher than California and the highest in the nation, according to AAA's Daily Fuel Gauge Report.

Prices on Maui have already topped $3 a gallon this week.

Frank Young, a member of Citizens Against Gasoline Price Gouging, a group that has backed the gas cap law, said the cap would ensure Hawaii residents paid fair prices.

But Fereidun Fesharaki, an energy expert with the East-West Center in Honolulu, said the gas cap was "a stupid idea" and a futile attempt to hold down oil prices as they rose around the globe.

"This kind of thing it just gives us a bad name, frightens people from investing — it may make one of the refineries shut down and leave Hawaii," Fesharaki said. "It reduces competition and does all harm but doesn't gain us anything."

Consumers are also skeptical of how effective it would be.

Nathan Slenk, a 25-year-olds student at Kapiolani Community College, said he doubts the state's effort would do anything to shield him from every-rising prices.

"The gas prices that are continuing to go up — how am I supposed to afford it?" said Slenk as he pumped regular unleaded gas into his small black sedan for $2.79 a gallon at downtown Honolulu gas station. "I think the state tries to do a lot of things, but as far as I'm concerned they never done good on anything."

The caps are based on a baseline price calculated from the five-day average of spot rates from three mainland markets: Los Angeles, New York harbor and the U.S. Gulf Coast.

The commission then adds on allowances for the cost of shipping to the state and for transporting gasoline from Oahu to more remote and less populated islands.

For example, under next week's cap wholesalers may not charge more than $2.3058 — about $2.74 including tax — for a gallon of regular unleaded gas in Hilo on the Big Island. Allowing for a retailer's markup, prices at the pump in Hilo could be close to $3 a gallon or more.

On Wednesday, the average retail price of a gallon of regular unleaded in Hilo stood at a record high of $2.849.

Federal, state, and county authorities each impose a fuel tax on wholesale gasoline. The state's excise tax is also imposed on gasoline at the wholesale and retail levels.

Gov. Linda Lingle, who unsuccessfully sought repeal of the 2004 law, has said she feels the cap will actually increase prices and create fuel shortages.

But Menor, D-Mililani, said Hawaii would be facing even higher prices now if the cap were not on the verge of being introduced.

The governor has the power to suspend the price caps if she determines they would cause a major adverse impact on the economy, public order, or the health, welfare or safety of the people of Hawaii.

The state Legislature first passed a gas price cap law in 2002 based on the average weekly price on the West Coast, but it was never implemented. Lawmakers in 2004 amended the law to set the cap based on an average index of prices around the country.

"The fact that their pricing mechanism is market-related minimizes the risk that a physical shortage would arise," said Tim Evans, senior oil analyst at IFR Energy Services in New York.

"They are attempting to go about this in an intelligent fashion," he added.

But other analysts were less sanguine about the possible damage from interfering in the market.

"It's a slippery slope," said Tom Kloza, director of the Oil Price Information Service in Wall, N.J. "You run the risk of dissuading some folks from marketing in certain areas."

Only time will tell, Kloza added.

Link Posted: 8/30/2005 11:12:19 AM EDT
Has the DU heard about this yet? No doubt they will be DEMANDING that this be enacted for every state.

Gas prices are out of control, but artificially controlling them wont fix the underlying source of the issue. Political correctness is killing the America I want to live in...and its really starting to piss me off.

The consumer should be setting the price of the product, as a function of supply and demand.
Consumers have allowed the gas prices to increase because they continue to purchase gas regardless of the price.

I understand we all need to get to work, pick up kids at school, go grocery shopping....I know, we need our cars....but dont think for a minute that this 'need' isnt directly responsible for the pricing.

If everyone stopped buying gas for a month, the prices will change. Probably not realistic, but if Americans took a united front against this bullshit, the prices would decrease.

Capitalism works in both directions...until governments decide to set limits
Link Posted: 8/30/2005 11:14:25 AM EDT
Didn't work for Nixon, won't for Hawaii.
Link Posted: 8/30/2005 11:14:50 AM EDT
If you sold something and it wasn't profitable...would you continue?
Link Posted: 8/30/2005 11:15:30 AM EDT
Price caps create shortages.

Happens every time.
Link Posted: 8/30/2005 11:18:07 AM EDT
Don't these fuckers understand that it is logistically impossible to sell gas in HI for the same prices as the mainland? My hope is that they will charge as much as humanly possible before the cap is instated, and then set the price right at the cap for as long as it is in effect, even on the offhand chance that prices go down to the point where the cap is unnecessary. Stick it right in their eye.
Link Posted: 8/30/2005 11:19:28 AM EDT
HI will have no gas. Easy answer to that question.
Link Posted: 8/30/2005 11:20:05 AM EDT

Originally Posted By subjectofcalifornia:
If you sold something and it wasn't profitable...would you continue?



The costs are ALWAYS passed to the consumers. In this case, the cost is convenience. There may not be gas available to you when you need it.

I wonder if the refineries could charge a "Service Fee" to the stations. This would increase the cost of the gas, but it would be charged seperately from the fuel. Stores would have to jack up their fuel prices at the pump, or raise their merchanside prices in the store to offset this fee.

At first reading it doesn't appear that the station prices are capped, only the whosesale prices...

Either way, the consumer pays it all.
Link Posted: 8/30/2005 11:20:17 AM EDT
i still vote for nationalizing the oil industry!
Link Posted: 8/30/2005 11:21:51 AM EDT
Capitalism, free trade and the law of supply and demand are officially dead. The government is slowly taking over.[tinfoil hat smiley]
Link Posted: 8/30/2005 11:23:19 AM EDT
What if whoever sells to the wholesaler charges him more than the cap? Oh, maybe he can make that up in volume. It'll work, YEAH, it'll work. Yeah.
Link Posted: 8/30/2005 11:25:43 AM EDT
I think they tried that back about 25 years ago. I was just a little kid, but I vaguely remember some talk of excess demand, resulting in huge lines for gas.

Hell, I don't even think price gouging should be illegal. Let the market distribute scarce goods to the highest-value users.
Link Posted: 8/30/2005 11:26:34 AM EDT
I genuinely miss $0.89/gallon gas, but capping prices is stupid.

Hawaii needs an economics lesson.


Maybe arfcom could take up a collection and send Old_Painless to Hawaii to give them a few economics 101 lessons on supply and demand.


Maybe while he was ther, he could do a 'beach edition' of the box o' truth.

Link Posted: 8/30/2005 11:30:46 AM EDT

Originally Posted By arowneragain:

Maybe arfcom could take up a collection and send Old_Painless to Hawaii to give them a few economics 101 lessons on supply and demand.


Maybe while he was ther, he could do a 'beach edition' of the box o' truth.




I will kick in a few bucks, but I want to see some comparisons of Lake city Vs Wolf, vs coconut, vs pineapple
Link Posted: 8/30/2005 11:34:32 AM EDT
Remember the electricity shortages in California a few years ago??? Get ready for teh same sort of gas shortages in the Islands......

Yup. Gas is expensive there. Then again, so is everything else. Get used to it.

If gas is too expensive, use less. Period.

If the Islands cap gas prices, the refineries will simply sell it elsewhere. Why sell gas to the Islands at a measly profit when you can sell it elsewere and make more money?
Link Posted: 8/30/2005 11:37:48 AM EDT
You can allocate gas by price, or you can allocate it by waiting in line or bribing officials.

I prefer the price mechanism.
Link Posted: 8/30/2005 11:41:10 AM EDT
welcome to economics 101, the hard way.

TXL
Link Posted: 8/30/2005 11:48:10 AM EDT
HI has always wanted to be different than the rest.....
Link Posted: 8/30/2005 11:49:03 AM EDT
Nobody fools around with Mother Nature Supply & Demand.

Payback will be a bitch.
Link Posted: 8/30/2005 11:56:43 AM EDT
It is nice to see that there are still people in this country that have not completely lost their mind...

It is amazing to see that some politicians actually think that something like price fixing actually has a snowball chance in hell of helping...

I don't think HI politicians are really that stupid, I think, like most (probably all) politicians, they know better but are just trying to manipulate the ignorant masses. People that somehow think that supply and demand is actually some big conspiracy by evil oil companies...

- AG
Link Posted: 8/30/2005 12:08:32 PM EDT
[Last Edit: 8/30/2005 12:09:43 PM EDT by kolohejr]

Originally Posted By RiftWeaver:
HI has always wanted to be different than the rest.....



WE ARE TREATED DIFFERENTLY.

Its not that we want to be different, its the fact that Most on the continental U.S. think we are different, like we are some kind of third world country. We thrive, We live, and Cherish our freedom.
Link Posted: 8/30/2005 12:10:47 PM EDT

Originally Posted By VTHOKIESHOOTER:
HI will have no gas. Easy answer to that question.



I think that that is exactly what is going to happen.

Link Posted: 8/30/2005 12:17:31 PM EDT

Originally Posted By Lord_Grey_Boots:

Originally Posted By VTHOKIESHOOTER:
HI will have no gas. Easy answer to that question.



I think that that is exactly what is going to happen.



Yup.
Link Posted: 8/30/2005 12:26:11 PM EDT
This thread is a dupe and there is a good deal of info in the original...

www.jobrelatedstuff.com/forums/topic.html?b=1&f=5&t=382755

BigDozer66
Link Posted: 8/30/2005 1:06:48 PM EDT

Originally Posted By BigDozer66:
This thread is a dupe and there is a good deal of info in the original...

www.jobrelatedstuff.com/forums/topic.html?b=1&f=5&t=382755

BigDozer66



Sorry for the wasted space. I didn't know, Next time I will use the search engine that I paid for.
Link Posted: 8/30/2005 1:08:54 PM EDT
Link Posted: 8/30/2005 1:20:52 PM EDT
Let's see how many oil companies will load up gasoline and ship it across the Pacific to sell it for less than the going rate???

My guess is.....................................NONE!!!!

Hawaii will either rescend this idiotic order or it will collapse under its own weight.

You can't legislate a free market.
Link Posted: 8/30/2005 1:37:37 PM EDT

Originally Posted By Sylvan:
Gee and they have that Republican Governer.

An "R" besides their name doesn't mean a thing.



Not in HI, or CA, or NY, or... ANY liberal state!
Link Posted: 8/30/2005 11:20:56 PM EDT
governer lingle(R) vetoed it, and the democraps in the legislature over rode it.
she had a press release last week that she will repeal the cap if it gets as bad as everyone fears.
I thinks she's going to sit back, let it go to hell for a while, then repeal the cap as an economics lession to the legislature.

Link Posted: 8/31/2005 7:19:24 AM EDT

Originally Posted By supercomp:
governer lingle(R) vetoed it, and the democraps in the legislature over rode it.
she had a press release last week that she will repeal the cap if it gets as bad as everyone fears.
I thinks she's going to sit back, let it go to hell for a while, then repeal the cap as an economics lession to the legislature.




This is going to be interesting.
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