NEWS: State of Hawaii Caps Gasoline Prices

Originally posted by djohnsto77
We live in a capitalist free-market nation, so can a State impose price controls on a commodity like this?

Yes, they'll do it for milk and bread and things like that. Foodstuffs have historically had lots of price capping on them. Also, the US is not set up on a capitalist free-market system. Its a mixed economy, which is important. The Federal Government, for example, dictates the price of new vehicles, they're considered a national commodity. The 'invisible hand' is hindered in the US (as opposed to being completely restrained or set up on marionette strings).

jhh
then either they will be cut off,

HA! That'd be interesting.
No, the oil companies aren't going to slowly strangle Hawaii to death. Its not an option.

DjOsiris
Especially when Hawaii is out in the middle of the worlds biggest power supply (Pacific Ocean)

Power generation via tidal forces is extraordinarily inefficient and wasteful. Gasoline is a really efficient, cheap, power supply. Thats why its used, its cheap and efficient.

Opec is putting the squeeze on the market. No doubt about it

The price increase is not related to supply. Its primarily a market phenomenon, not a supply problem. It has nothing to do with OPEC.

[edit on 25-8-2005 by Nygdan]

Originally posted by DjOsiris
In my opinion, we shouldn't be wasting valuable tax subsidies on such a wasteful and polluting resource. Especially when Hawaii is out in the middle of the worlds biggest power supply (Pacific Ocean) and hydrogen car research has gotten to the point where there are 100% H2 cars availiable. Hawaii has plenty of people that can easily afford a whole garage of these cars so why can't they put their money to better use and invest in the future by building the beginnings of infrastructure to support this? Or at the least using the tax money for research purposes. While I thik Hawaii is cool and all I sure don't want to be helping them get cheaper gas. I can see it now, the Oil giants will be screaming at congress for this and raising prices even more because of "futures speculation"!

Try living out here and then say something like that. A box of cereal can go for over $6. The excuse is that it costs so much more to ship things in here, since we can't truck them in. Molokai has two gas stations, and are paying $3.50+ for a gallon of gas. Every excuse in the book is used to give the excuse of why our prices are so high here.

We need a price cap, but the way this one is writeen we're going to get screwed either way. They tied it into three mainland markets that have high prices, so it's entirely possible that on Septmeber first our gas prices will go up $0.22/gallon under the new law.

The cap is on wholesale, but the retailers are limited in how much they can add to the price. I believe it's $0.50 above what the price becomes after taxes.

[edit on 25-8-2005 by Zaphod58]

Originally posted by shots

Originally posted by Nygdan


Evian water, $1.49 /9 oz, $21.19 per gallon cite
and here's a great one:
Lipton Ice Tea $1.19/16 oz $9.52 per gallon .

Ice tea, which is water, with lots of other stuff in it, is cheaper than bottled water! ITS ALMOST ENTIRELY WATER!

Lets all agree the overal price of water out prices gas except when you buy it by the gallon, I can get it for 59 cents at a grocery store here if I have my own container. But that is not the norm. Most people buy it in smaller bottles at 2.00 a bottle for Evian here, so here the cost is even higher, but lets not jack DJs thread by getting off topic.

For those in doubt about bottle water read this and you will see you are only buying the marketing hype nothing more.

[edit on 8/25/2005 by shots]

[edit on 8/25/2005 by shots]

GOOD GRIEF, PEOPLE! Just go to the kitchen and turn on the tap!

In all seriousness though, I heard that people in Iraq are paying for gasoline, what it costs me to make a pot of coffee, which equals about a nickel a pot.

Okay-okay, it's war-torn Iraq...but .5 a gallon versus 2.63? (Which is what I paid when I gassed up tonight.) Something is rotten in Denmark! And I don't mean the cheese!

BTW, California had price controls on it's Electricity for ten years. Yes, Electricity was cheap for that time...but boy, it sure came back and bit us in the end! The thing to do is simply to PERMANENTLY set rates at which gasoline is allowed to increase. (Say...oh...Six percent a year.) I think they could live with that.

[edit on 26-8-2005 by Toelint]

Originally posted by Toelint
Okay-okay, it's war-torn Iraq...but .5 a gallon versus 2.63? (Which is what I paid when I gassed up tonight.) Something is rotten in Denmark! And I don't mean the cheese!

I don't see how its rotten. Its an oil producing country that apparently runs the oil nationally. That means that the oils is practically free for them as a society. I don't know about a nickle a gallon tho.

PERMANENTLY set rates at which gasoline is allowed to increase. (

Some people have suggested that, assuming that the price will drop to what it was before this recent upsurge, that we put a cap to freeze the price, even if it goes down. The reasoning is, we have high prices, its not wrecking the economy and people can obviously afford it, and it'd generate large revenue.

I like it. During my travels this week I stopped at a gas station in a county about 20 minutes outside NYC and they were charging an OBSCENE $3.06 per gallon. Now I'm too young to remember the craziness at the gas stations in the early 70s due to the fact that I wasn't born yet, but this is pretty out of hand.

I don't think New York State will ever cap the price like Hawaii is intending to do, so I'm pretty much out of luck.

It's a funny thing this "gas crisis". As much as we all whine and yell about it, no one is willing to do anything about it. We kick and scream at the pump, but we still go just as often. No one is buying a bicycle or roller skates etc.

The American economy doesn't know how to deal with this. In most cases, if someone was charging prices that were deemed unacceptable, people simply wouldn't buy any and they'd be forced to lower the prices. Economics 101. But with gas, there's nothing you can do. People drive, they will continue to drive, and that's that.

We can call it gouging, we can call it unfair, we can call it a ripoff, but we will all still go fill up once a week or whatever.

Well, I guess if the trend continues the US roads will look more like Europe with lots of Renaults Fiats and Opels. Should be interesting.

I think the idea of government trying to repeal the Laws of Supply and Demand makes about as much sense as the government setting the value of pi to 3.000 to make their kid's math homework easier!

Thre are two major wholesalers in Hawaii; if they are in collusion to keep wholesale prices high, they can be prosecuted under anti-trust legislation.

But if you place a cap on how much a person or business can sell something for -- and not limit the price he has to pay for it (and I don't think we can impose "price caps" on foreigh oil) -- then the sellers are going to get to a point where they cannot make money by selling at a capped price and will simply go out of business.

The other option will be a black market where you can buy gasoline ("illegally") for its actual value (say, ~$3.10/gallon) or not buy any gasoline at all.

Now what you've done is to turn buyers and sellers into "criminals" and the cost of attempting to enforce un-enforceable laws will add further to the cost of goods and services and further erode thatever freedoms Hawaiians, whether malahini or kamaaina, have now.

Hasn't anyone here taken a macroeconomics course?

"It's a market effect."

That's very glib and vague. People would like to be informed with specific verifiable facts how "the market" is causing the high gas prices. Which "elements" of "the market" are doing this? How? Who? Where? When? What is the per gallon cost of crude? What is the per gallon expense of converting crude into pumpable gasoline? What is the per gallon cost of moving it from the refinery to the gas station storage tanks? What is the supplier's, refiner's, and gas station's per gallon profit margin? The general public views the fluctuation in gas prices to be rather mysterious. Rightly so, because the causes are deliberately cloaked in incomprehensible economics-babble such as "it's a market effect". A clear explanation of the underying elements would clear the fog and we could perhaps all understand whether the public's wallet is again being raped by those who hold the power over "market effects" or or whether the current high prces are justifiable by some factor other than greed and opportunism.

The public and private consumers of gasoline provide a steady, inexhaustible, and growing demand for gasoline. There is little if any fluctuation on the demand side. Many posts on this thread state that there is no shortage on the supply side. So, the question is, what is causing the current rise in prices? It isn't demand. It isn't supply. So it must be caused by nonmarket forces such as price manipulation by those who control the supply. Apparently, Hawaii sees through the fog and has decided to treat the situation as what it is: a pricing system that is, in fact, not controlled by market effects.

If you disagree, then please say something intelligible rather than repeating the nonsensical economics-bable such as "it's a market effect".

Originally posted by dubiousone

That's very glib and vague. People would like to be informed with specific verifiable facts how "the market" is causing the high gas prices. Which "elements" of "the market" are doing this? How? Who? Where? When? What is the per gallon cost of crude? What is the per gallon expense of converting crude into pumpable gasoline? What is the per gallon cost of moving it from the refinery to the gas station storage tanks? What is the supplier's, refiner's, and gas station's per gallon profit margin? ".

You will find the answers to your questions on this page there are several charts giving a month by month break down for this year. They are for CA so the state tax would have to be adjusted for your area, but it does give you a good idea.

www.energy.ca.gov...

[edit on 8/26/2005 by shots]

Let's make that a country-wide initiative. But congratulations. Great work.

10 more posts to go before I can send a u2u to another member.

Odysseus

Remember those Emails that used to float around about everyone not getting gas for a day or two? I wonder if there could be a way to recirculate this and supposedly lower prices by backing the stuff up on the dock? Anyone?

They just had an incident on Molokai where they had a day or so with no gas anywhere on the island, because, the gas stations were told to mix the premium with unleaded to extend stores a little bit, which became "Oh my god the barge isn't coming for another month." After that person called their friend to warn them, it got all around the island that there was a gas shortage, and everyone stormed the two gas stations, until the DID run out of gas. The next day the barge showed up with the gas trucks on it, to refill the stations. Self fulfilling prophecy.