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The Honolulu Advertiser
Posted on: Tuesday, September 6, 2005

COMMENTARY
Gas cap is proving to be foolhardy venture

By David J. Harrington

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Were this any state but Hawai'i, the recent headlines that the gas cap would increase prices at the pump by as much as 30 cents a gallon would be enough to have voters clamoring for the heads of the elected officials responsible for enacting the law.

Of course, were this any state but Hawai'i, we wouldn't have such an absurd law to begin with, as evidenced by the fact that we are the only state to do so.

Gas prices in Hawai'i are only marginally higher than those in California. Compare that with the difference in the prices of milk, bread, produce or cereal, which are all several times more expensive here.

Most, if not all, of the difference in gas prices is due to the taxes that these same politicians have levied on us. In Honolulu, the state, local and general excise taxes on gasoline totals about 45 cents a gallon, compared to 26.1 cents in California. Hawai'i gasoline taxes are the highest in the nation, and what we get in return for this distinction is littered and gravel-covered highway shoulders, overgrown median strips, potholes and a bloated and incompetent Department of Transportation.

If the politicians want to help consumers at the pump, they should lower taxes, or at least get some productivity out of the HGEA for the monies collected.

Regardless of the impact on prices, government has no business interfering with the free-market economics of capitalism. This widely known and universally accepted economic principle is being ignored by some Democrats in favor of their favorite pastime, Big Oil bashing. These are the same officials responsible for bringing numerous costly and unsuccessful lawsuits against the oil companies. These attacks, along with the gas cap, only help to justify the world's perception that the Hawai'i state government is anti-business.

The rise in the price of crude oil is a worldwide phenomenon that the free markets will correct in time, as they always have in the past. While the oil companies are certainly profiting from high prices, they are not the culprits our politicians make them out to be. In fact, they are actually good corporate citizens, contributing an enormous amount of money to our tax base, employing hundreds of residents and supporting local charities. Rather than harassing them, the government should have been working with them to correct some of the real but complex problems, such as lagging price reductions.

Hurricane Katrina has assured that the price increases, panic buying, supply disruptions and gas shortages that were predicted by the state's own consultants are now inevitable. The irony is that it is the gas cap and not Katrina, by itself, that will cause these effects.

Without the gas cap, we would have been relatively unaffected by Katrina because while gasoline prices have soared on the Mainland due to supply disruptions, crude oil prices have not risen dramatically. We do not import gasoline, we import crude oil and make all of our gas here. So our gasoline prices will go up due directly to this misguided legislation because the wholesale prices here are based on areas that are affected by the disruptions on the Mainland.

It is also inevitable that this law, like so many other foolish laws before it, will be repealed. It is doomed to failure by its very nature. However, it is not up to the governor to suspend the law, it is up to its architects and supporters to go back into session and repeal it.

I can only hope that the voters remember the damage done and the names of the Democrats responsible for it when it comes election time.

David J. Harrington is a businessman who lives in Kane'ohe. He wrote this commentary for The Advertiser.