There are essentially two gas cap bills sitting on the governor’s desk right now. One will will start the cap July 1. The other will push the cap away for another year. The latter limits the amount distributors can charge.
There are essentially two gas cap bills sitting on the governor’s desk right now. One will will start the cap July 1. The other will push the cap away for another year. The latter limits the amount distributors can charge. The former caps the amount wholesalers and retailers can charge.
How will either affect Kaua‘i?
Long-considered a solution by politicians responding to outcries of high gas prices, the gas cap will only hurt businesses and ultimately do little to mitigate prices at the pump, some argue.
“The new bill is not intended to lower the prices,” said Roger Cable, general manager of Senter Petroleum, Inc. “It’s intended to set the price that the supplier can charge to deliver to service stations.”
The July 1 cap, otherwise known as Act 77, was passed in 2002. The Sept. cap — the new bill — is just another way to ward off the issue for another year, except it caps the distributor’s asking price.
“The new bill forgets that there’s a middle man here,” Cable said. “We can’t deliver gas without making a profit.”
Hawaii’s gas prices are comparable to the mainland’s, Cable said. It’s the taxes here, and the natural costs of doing business in Hawaii, that drive up prices, he said.
“If they really wanted to do something about the price of gas at the pump, they should cut some taxes,” Cable said.
Senter is one of two Kaua‘i-based gas distributors who service a total of six independently owned stations here. Kaua‘i Petroleum handles four independent 76 stations and Senter handles two Chevron stations.
“They could be priced right out of the market if the new bill is passed,” Cable says.
Worse yet, any business that uses large amounts of gas — farmers, hospitals, plantations, hotels, construction companies — rely on these two distributors.
Businesses large and small could suffer if either of the two gas distributors here go out of business, Cable argues.
“The large suppliers will not give gas to the small independents,” says Marvin Taba, owner of an independent Chevron station in Kalaheo.
“If we lose the distributors, then we won’t have gas and we go out of business.”
Indeed, the large suppliers — that is, those major suppliers that service larger, corporate-owned stations here, or have a large-enough volume to make it worthwhile for them — have, until now, refused to deliver to small independents or businesses like his, Taba said.
Many gas-using businesses require pumping technology, while the large suppliers only service gravity-filled tanks, Cable said.
“All these bills mean is more profit for the big suppliers who won’t care about the little guy,” Cable said.
The governor has three options: first, she could sign the new bill, known as Senate Bill 3193, which would start a cap in September of 2005.
That gives another legislative session to find ways of killing the cap.
Second, she could not sign it and let it become law.
By not signing, the law still exists, only she’s mitigated to some degree any political fallout.
In other words, the administration will still be able to, with some degree of confidence, call itself pro-business.
Finally, the governor could veto the bill, which would allow the old 2002 law, Act 77, to take effect. That law would mean that gas caps would begin July 1.
“I don’t think anyone on either side of the issue wants Act 77 to happen,” Cable said. “I don’t think she’ll sign any of them.”
As of Friday, the governor hadn’t made a decision.
She has until June 30 to decide. In the meantime, local distributors — and their direct supplier counterparts — are nervously awaiting the outcome.
Whatever the governor decides, it will make Hawaii the first state in the country with a gas cap.
The following are generally considered the major driver of gas prices: consumer confidence, the war in Iraq, the squeeze on refinery products and the demand for oil for China’s burgeoning economy.
