Hawaii caps wholesale gasoline prices

| 8/25/2005

A law that limits the wholesale price of gasoline in Hawaii is set to go into effect next month, making it the first state in the nation to limit prices.

The original version of the bill included diesel in the price cap, but dropped the provision in the final version.

On Sept. 1, the new law will limit wholesale gasoline prices at just under $2.16 a gallon. Combined with the state’s 59-cent gas tax, the pre-retail price per gallon of regular unleaded will be $2.74. According to The Associated Press, retailers typically charge a 12-cent-per-gallon markup, bringing the total cost per gallon for consumers to $2.86.

Hawaii lawmakers originally passed the bill, SB3193, in 2002, with an effective date of July 2004. However, the start date was pushed back 14 months to September 2005 to further study its impact and make adjustments.

The amended price-cap formula is intended to ease Hawaii’s inflated gas prices by tying the prices to a weekly national average instead of a West Coast benchmark.