In the now-somewhat-classic movie comedy "Airplane," Lloyd Bridges plays an air traffic controller under stress. Shortly into the movie, he asserts that he picked a bad time to quit smoking; later on, he states he picked a bad time to quit drinking; then he claims it is a bad time to quit amphetamines. Our short experience with the gasoline price cap seems somewhat the same: We picked a terrible time to impose it.

In the first weeks of the cap, we saw that the cap will not bring down prices (more on this below). Rather, we see how the cap brings the volatility of the Mainland markets' prices into our previously quiet market. As consumers and voters should be asking ourselves, "How did we get ourselves into the plot of this nightmare movie?"

Although it is not explicitly stated in the law, the real purpose of the gas cap is to lower gas prices. That's the unstated legislative intent, and that is why proponents have justified the legislation. Because the law will not lower prices, some have suggested that the law is to bring "fair" gas prices to Hawai'i.

The trouble is, "fair" is impossible to define to everyone's satisfaction.

What the law does say —and does — is to tie Hawai'i's gasoline prices to three Mainland markets: New York, the Gulf Coast and Los Angeles. In doing this, the law will force Hawai'i prices to behave more like Mainland prices: Sometimes they will go up, sometimes they will go down, and sometimes they will move up and down really fast.

And this is some peoples' definition of "fair."

The gas cap applies to wholesale prices only. To assess the impact of the caps on retail prices requires that we add taxes (a known item) and retailers' markups (an estimated item). I did this for the 12 months before the start of the price cap. What I found was that actual prices in Ho-nolulu were on average 2.88 cents per gallon lower than would have been allowed by the PUC's cap. The cap would have lowered prices only 41 percent of the time during the 12-month period. (See the chart.)

In other words, the cap would not have reduced prices as some had hoped for.

Rather, as explicitly intended by the law, the cap would have introduced more volatility to the prices. So there would have been periods when prices would have been reduced by the cap, but these lower-price periods are more than offset by the periods of higher prices.

Some have suggested that gasoline companies should restrain themselves and not charge up to the price cap. But this is actually inconsistent with the purpose of the cap. The cap seeks to establish a pattern of prices that is like Mainland markets.

As such, when Mainland prices go up, we should expect gasoline companies to raise prices, since that is what occurs on the Mainland. And in fact, they will have incentives to do so.

If you are a seller of a product and you suspect you will be forced to sell at a lower price in the future, you will sell at a higher price when you can. Making hay while the sun shines is not much different than raising prices when the cap allows you to. Already we are seeing this happen.

By the end of each of the first two weeks of the cap, the average Honolulu retail price was actually above our predicted price with the cap.

Advocates of the price cap will tell you that our prices will come down when Mainland prices do. Indeed, that is expected to happen this week as the cap comes down as a result of easing Mainland prices. However, they didn't need to go up to begin with.

A look at the chart shows that before the cap, when Mainland prices spiked, Hawai'i prices barely budged. Not until the cap was in place did the Hawai'i prices follow the spike.

The cap will cause distortions in markets. For example, wholesalers may delay delivery if they know next week's price will be higher. As we have already witnessed, consumers will accelerate purchases if they know next week's price will be higher.

As a result, stations may run out of product.

The "jobber" sector of the industry may be particularly hard hit. These are the guys with the tanker trucks who buy from the refiners and sell to the retailers. Since the law only establishes one wholesale price, the refiners are free to price at that price cap, and the jobbers would have no profit margin because the price they can sell at is the same price cap.

Some have suggested that the gas cap should be given a chance to work, and that the unfortunate timing of its implementation should not influence us.

I disagree.

The cap is a bad idea in the short run, and it is a bad idea in the long run. As I have noted above, over the period of a year, the cap likely would have raised average gasoline prices and introduced volatility that few would have expected. This kind of socio-economic experimenting comes at a price to consumers and businesses.

Some public officials have blamed the PUC for faulty implementation of the law and assert that it can be fixed.

Lowering the markups allowed by the statute would lower the wholesale price cap. However, lowering wholesale prices would not necessarily lower retail prices. An integrated seller, such as Chevron or Tesoro, that makes gasoline, transports it and sells it through its company-owned stations is not subject to the price cap on those sales because there are no wholesale transactions.

The only way they will lower prices is if other retailers who buy their product at a capped wholesale price sell at lower prices. That seems unlikely, especially because the source of their product is the refiners themselves.

Tinkering with the gas price cap formula will not help. The whole idea is flawed and no amount of adjustments will make it work.

And that brings me back to the movie "Airplane." At the end of the film, the plane crash-lands and skids down the runway. The airport terminal announces the arrival of the flight at Gate 21 ... 22 ... 23 ... 24. Well, the price cap is now arriving at $2.88 per gallon ... $3.25 per gallon ... $3.50 per gallon.