Gas cap could decrease prices, but would it work? - Hawaii News Now - KGMB and KHNL

Gas cap could decrease prices, but would it work?

Georgette Silva Georgette Silva
Pernel Filoteo Pernel Filoteo
Richard Borreca Richard Borreca
Ron Menor Ron Menor

HONOLULU (HawaiiNewsNow) - Across the state this week, gas prices are setting new records. From an average of $4.42 in Honolulu to nearly $5.00 per gallon in Wailuku, Maui, it's no wonder some people are wistfully recalling the days of Hawaii's gas price cap, a few years ago.

What if that gap were in place today? Well, for one thing, prices would be cheaper with a cap in place, but it's not that simple. A big drawback is dramatic ups and downs in gas prices, and that's one reason why the gas cap only survived nine months before being repealed.

Pernel Filoteo and his girlfriend drive from Ewa Beach to town every day for work. They struggle to fill up the tank. His girlfriend, Georgette Silva says, "Me and him work, but it's not really cutting it. Filoteo explained that every couple days, he's refilling his gas tank, "Fill em up, it lasts me three more days. In the week, I put about 80 dollars." That's double what they were paying in November of 2008.

Three years before that, in 2005, Senator Ron Menor tried to ease the price spikes by introducing the gas cap. That legislation tied Hawaii's prices to mainland gas costs. He thinks the cap should still be in place. "Well, I believe that there would be significant savings. Consumers could be saving, roughly 20 to 30 cents per gallon if we had gas pricing regulation," the former senator told us. Menor also says the governor has the authority to bring back the gas cap, and he should use it, "I really think it is only a matter of time before elected officials, including the governor, are forced to address the issue."

The question is, would it really make a difference? Market analyst Frank Young says yes. If the cap were in place today, Oahu drivers would pay about $4.25 per gallon. On Kauai and Maui, that'd be $4.39, and on the Big Island, about $4.43. In general, that means 15 to 20 cents cheaper than the current averages. Menor says, "People are paying higher prices because we have an uncompetitive market in which the oil companies are willing to charge whatever they can bear."

But, one of the reasons the cap isn't in place today is because it caused chaos at the pump. Prices still fluctuated, but the artificial cap gave drivers a heads up on increases. Richard Borreca, who's a columnist for the Star-Advertiser explained it, "So you knew that the price was going to go up, twenty cents tomorrow, so everyone would be in line the night before to get gasoline. It was confusing, it wasn't popular, and at the end, it wasn't saving this much money one way or the other."

On the other hand, Menor says, "I believe that the regulation would lower prices and provide consumers with significant savings."

Borreca retorts, "It was an artificial solution to a problem that the marketplace has to handle itself."

The controversy remains. With less than two weeks left in the Legislative Session, it's a debate that'll have to wait for another year. In the meantime, get used to those high prices. Experts are predicting $6.00 a gallon by summertime.

Copyright 2011 Hawaii News Now. All rights reserved.

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