25 August 2005
Sorry, we're out of that grade
Hawaii, where gas starts at expensive and goes up from there, is imposing price controls at the wholesale level. A new state law enables the Public Utilities Commission in Honolulu to set a maximum wholesale price, which initially will be a shade under $2.16 a gallon. Add taxes (which are huge) and retail markup (which isn't), and islanders will presumably be looking at $2.86 at the pump.
Whether they'll actually get to pump anything at $2.86 remains to be seen. When it comes to killing the supply of a commodity, there are few actions quite as efficient as the imposition of price controls, as the Governor is about to learn:
Hawaii Gov. Linda Lingle said she's poised to repeal the gas cap if it somehow ends up costing motorists more. The governor said she would be checking gas price points to see if there are any gas shortages before she makes up her mind about repealing it.
I give it six weeks.