Hawaiian Gas Cap Bleeds Customers Even Drier

Now that we are all paying for gas not with money (who can afford it?) but priceless, non-inflationary currencies like our daughter’s virginities and healthy human livers, you might start thinking that the government should get involved. “They should regulate, control and cap gasoline prices for our nation’s motorists!” you might cry.

We hate to be libertarians here, but think about it for a second: when has the government getting involved with practically anything worked out? And to prove our point, let’s take a look at Hawaii’s failed eight month attempt to cap gasoline prices. Hawaii pays more per gallon than any state in the union. So on September 1st, Hawaii imposed weekly limits on wholesale gas prices based on the average of prices in Los Angeles, New York and the Gulf Coast. Allowances were made for shipping costs. There was no cap on gas station mark-up.

At the end of the day, how much did Hawaiians save? Negative 53.3 million dollars. The price cap just encouraged all the gas companies to charge the maximum amount. A huge political boner gouged through the eye socket of the Hawaiian consumer.

Hawaiian Gas Cap Running on Fumes [Washington Post]

Comments

Edit Your Comment

  1. Paul D says:

    I’d chalk this up to a good idea poorly executed. Corporations will ALWAYS find the loopholes, especially if the loopholes are of the “gaping” variety.

  2. bifyu says:

    as a HI resident, put me in the camp of just having no idea if it was effective or not. we had no basis for comparision. now that the cap has been repealed, I’d like to see some data on actual prices vs. what they would have been under the cap. you’d think they would have done some similar study before originally implementing the cap, but I never heard about it. all I know is that prior to the cap, prices would ratchet up very quickly on any pretense, but come down again about as slowly as water evaporates in a bog.

  3. Morgan says:

    Setting the cap based on prices in the most expensive areas in the continental US, which are probably most prone to increase, was the problem. A cap based on crude oil prices could work, and it would work best if they set the max price to considerably lower than what we’re paying now. It shouldn’t be too hard to calculate a cap based on crude oil rates (and adding in transportation costs) that would allow companies to still be making a good profit without gouging customers.

  4. AcidReign says:

    …..Governmental price caps cause more trouble than they’re worth. Contrary to popular belief, you’re not guaranteed bargain gasoline in the US Constitution! I lived through the early 1970s Oil Embargo. It wasn’t fun. No, no station could gouge, due to regulation, but the oil companies just decided that they could no longer sell at the government-mandated price, and huge shortages and massive gas lines resulted!

  5. matto says:

    Having grown up in Honolulu, this is the sort of state government cock-up and corporate price-fixing collusion that made living there such a paradise-like, aloha experience.

    The part I don’t quite get is how I ended up in California, possibly the only place in the universe where there’s a chance of an even more brutal cornholing.

  6. bifyu says:

    I think the intent of the cap was not to try and assure “bargain gasoline” but to counteract the widely suspected collusion between the state’s two refiners in maintaining prices higher than warranted by market conditions. actual investigations into this alleged collusion have always been inconclusive. the refiners were naturally reluctant to cooperate, and generally fell back to “giant well respected corporations like us would never do such a thing!”