Plan on paying eight cents more for a gallon of gasoline next week, maybe as soon as tomorrow, Monday, Oct. 10
Beginning to sound familiar?
Welcome to life under Hawai’i’s wholesale gas-cap law.
Due in part to continuing disruptions caused by Hurricane Rita, Kaua’i gasoline prices at the pump have increased 33 cents a gallon for self-service regular in the past two weeks after stabilizing for a brief period.
Members of the state Public Utilities Commission (PUC) Wednesday raised the maximum pre-tax wholesale price of gasoline by 8 cents.
The state gas-cap law, which went into effect Sept. 1, does not put a cap on how much retailers may charge.
The gas-cap law is the first of its kind in the nation.
“I’m not surprised. It could take months till prices stabilize,” said David Hackett, president of Stillwater Associates LLC, a fuel- and gasoline-industry consultancy whose leaders have worked with officials in state government in studying the gas-cap law.
“The gas cap has introduced tremendous volatility,” he said. Hackett pointed out that, although Hawai’i does not get its oil from the Gulf Coast refineries which have been severely impacted by back-to-back hurricanes, it is still affected by national trends.
“I think the relative margin for retail gasoline dealers is OK. It’s the consumer that is getting the short end of the stick.”
The weekly maximum pre-tax wholesale price of gasoline for the seven-day period from Monday, Oct. 10, to Sunday, Oct. 16, for Kaua’i, was set by PUC members at $2.796, up from $2.71 last week.
To determine what drivers will likely pay at the pump beginning as early as tomorrow, Monday, Oct. 10, take that base price of $2.79, then add about 61 cents in taxes, and the total is $3.41. 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 $3.60-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 whole-sale-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.
According to the AAA Daily Fuel Gauge Report as of Wednesday, not counting the PUC increase, Hawai’i boasted the highest gas prices in the nation, at $3.286 for a gallon of regular gasoline. This is 14 cents more than the District of Columbia. Hawai’i prices are 28 cents a gallon higher than California, and 33 cents higher than New York.
- Andy Gross, business editor, may be reached at 245-3681 (ext. 251), or email@example.com