Hawaii Becomes First State to Cap Gas Prices
by Justin Thomas, Virginia on 08.26.05
Hawaii has become the first state in the nation to set limits on gasoline prices. It's a move critics warn could lead to supply shortages. The state Public Utilities Commission is setting the wholesale price ceiling for gasoline in Honolulu at just under $2.16 a gallon. With taxes, the wholesale price would be $2.74. If wholesalers charge that price and retailers keep their typical 12-cent markup, then the price of a gallon of regular unleaded in Honolulu could rise to $2.86 per gallon.
The caps apply as of next week, when a new law goes into effect allowing Hawaii to set a maximum wholesale price at which gasoline can be sold. The law doesn't put a cap on retail prices. :: Rueters
Once again the short sighted among us artifically prop up our nation's oil/automobile dependance. I I wish that those bemoaning oil prices would put a little faith in the "free market" they seem to belive in so strongly, and allow prices to usher in the sustainable energy revolution.
There may be a bright side to this. Think about what would happen if a gasoline shortage does develop in Hawaii and gasoline ends up being rationed. Maybe, when people dont have a way to get to work, they will actually realize that they need more fuel-efficient vehicles or public transportation.
Look at MommyCool.com for a great cartoon about what happened to one mom's piggy bank when adding gas to her minivan yesterday.
Who had this brilliant idea? Won't the suppliers be forced to sell at a loss? Gas stations will dry up pretty quick. Gas is $3 or more here, people might complain but they aint started no riot. Hawaii is in for problems whether they cap prices or not.
Butane Bob,
The difference in price is to be subsidized. Suppliers won't sell at a loss.
If suppliers are subsidized by the state, then Hawaii taxpayers are taking a hit for gasoline consumers. Presumably, not everyone there drives, and they'll be the ones paying disproportinately. Way to go!
Similarly, price signals are being distorted, so SUV owners aren't being (metaphorically) smacked upside the head as hard.
Exactly. Hawaii is basically subsidizing pollution and levelling the playing field a bit between people who try to conserve and those who don't.
Increasing fuel prices is a good thing in the end. It'll get people to conserve, buy and demand more fuel efficient vehicles. My hope is energy costs will rise quickly enough to cause real change but slowly enough so the economy isn't shocked into a recession.
This sounds like a recipe for 1970s style gas lines to me ... Which were also caused by price controls on gasoline.
I lived in Hawaii for 6 months, I'm glad I won't be there when this starts creating problems.