Thanks in large part to disruptions caused by Hurricane Rita, Kaua’i motorists can expect gasoline prices at the pump to increase 25 cents for a gallon of regular as early as Monday, Oct. 3.
Members of the state Public Utilities Commission (PUC) raised the maximum pre-tax wholesale price of gasoline by 25 cents.
The state gas-cap law, which went into effect Sept. 1, does not put a cap on how much retailers may charge.
Prior to this week’s rate hike, the pre-tax cap price had dropped six cents last week after having soared 72 cents since the law was implemented.
The weekly maximum pretax wholesale price of gasoline for the seven-day period from Monday, Oct. 3, to Sunday, Oct. 9, for Kaua’i, was set by PUC members at $2.71, up from $2.46 last week.
To determine what drivers will likely pay at the pump beginning as early as Monday, take that base price of $2.71, then add about 61 cents in taxes, and the total is $3.32. Add the dealer mark-up at the pump, which on Kaua’i can be any where from 18 cents to 30 cents, and the price of unleaded regular gasoline will be in the $3.55-plus range.
The weekly cap established by PUC members sets the maximum amount officials at the oil companies can charge for wholesale gasoline.
The baseline price established by members of the state Legislature under the wholesale-price-cap law and used by PUC members is the weekly average of the daily spot price for Los Angeles, the U.S. Gulf Coast, and New York.
State Rep. Marcus Oshiro, D-Wahiawa, said, “We expected gas prices to rise next week due to the effects of Hurricane Rita. As with the rest of the Mainland, however, Hawai’i needs to be concerned about any potential price gouging,” Oshiro said.
“That is why I asked Governor Lingle last week to join with other state governors to support a pending investigation by the Federal Trade Commission into nationwide allegations of gasoline-price gouging by oil companies in the wake of Hurricane Katrina and now Hurricane Rita.”
Dr. Leroy O. Laney, professor of economics and finance at Hawaii Pacific University and a consultant to leaders of First Hawaiian Bank, called the gas cap a “bad policy.”
“It might have seemed like a good idea, but it has added great volatility to the market,” he said.
- Andy Gross, business editor, may be reached at 245-3681 (ext. 251), or firstname.lastname@example.org