A recent 25-cents-a-gallon spike in gasoline prices means Hawai'i once again has the highest pump prices in the nation. What's still unclear is why prices are rising and whether refiners, distributors or retailers are to blame.

More transparency in the oil industry was the goal of a new $1.2 million-a-year state program put in place after lawmakers abolished a cap on gasoline prices.

As of September the state has been releasing weekly petroleum industry reports, but they aren't yet answering questions about Hawai'i's oil industry profitability. The reports have been criticized as a useless and even inaccurate barometer of industry profits.

"It's very disappointing as we watch these reports come out," said state House Majority Leader Kirk Caldwell, D-24th (Manoa). "They still don't contain any data regarding the weekly average profits or the margins, and in the end, that's what we were trying to find out, so that consumers in our state could know whether there are excessive profits being gained."

The petroleum industry reporting program was supposed to be a market-friendly alternative to Hawai'i's controversial gasoline price caps, which regulated wholesale prices from September 2005 to May 2006. It was hoped that a public spotlight would discourage unfair pricing and provide the basis for regulatory solutions to Hawai'i's high gasoline prices.

Hawai'i consumers typically pay the nation's highest gasoline prices in part because of the high cost of doing business in the state, geographic isolation, high taxes and a lack of Mainland-style competition.

Under the program passed in 2006 and amended earlier this year, oil companies must disclose crude oil costs and sources, refinery operating expenses, marketing and distribution expenses, and corporate overhead expenses to the state Public Utilities Commission. The state agency must publically release data from those forms 14 days later.

However, the PUC maintains that state laws make most of that information confidential, including crude oil and other refining costs.

Rather, the PUC weekly discloses the average difference between wholesale and retail prices — or essentially a retail gasoline markup.

Gas station operators mark up gasoline to cover the cost of doing business. According to the PUC, the average markup on regular gasoline was 56 cents a gallon for regular gasoline on O'ahu in September. However, gasoline dealers contend the actual spread between wholesale and retail prices is typically less than 20 cents a gallon.

"Fifty cents is just a ridiculous number," said Bill Green, a former owner of, and now consultant to, Kahala Shell. "I don't know how they get to it. When they come up with a number like that, it just makes it tougher (on dealers)."

According to the federal Energy Information Administration, the average gap between wholesale and retail prices in September was 20 cents a gallon statewide, versus nearly 13 cents for the nation overall. The difference between federal and state figures could be caused by differences in data reporting periods, locations and reporting entities, according to the PUC.

The agency said it is working with a consultant to expand the information provided in its reports.

"Currently, the reports present aggregated ending inventory and wholesale and retail transaction details, where available, which some may indeed find informative and meaningful," the PUC said in a statement responding to Advertiser questions. "However, the commission is working with a consultant to look at other data and information that may be added to the report in the near future.

"Disclosure of data to the public is complicated and limited by the fact that the data from reporting entities is filed under protective seal," the PUC statement said.

The lack of more public disclosure makes the program nearly useless, said petroleum industry consultant Tim Hamilton. Hamilton, who has advised lawmakers on petroleum issues, said the program should give consumers information about who raises prices and why.

"That was the purpose of transparency," said Hamilton, who is based near Olympia, Wash. "When the public can't see, it's not transparent. It's a joke.

"The PUC's got (the information), but if they give it to you, they have to kill you."

Local oil industry officials have said they are willing to cooperate with the new law but are concerned about keeping their information confidential.

Tesoro Corp. would not comment on how well the program is working so far.

"We're following state law and cooperating with the PUC in providing this data," said Lance Tanaka, Tesoro Corp.'s government relations manager. "We're not the ones ... who really will determine how well the PUC is complying with the law."

Publicly disclosing information about the costs and profits of individual companies could hurt competition and won't necessarily help consumers make better decisions, said Chevron spokesman Al Chee.

"I know the concept or the theory is to arm consumers with information so they can make an informed decision," he said. But, "It's conceivable that the company that has the lowest price may have the highest profits. So if you have disdain for companies because they seem to be making a lot of money, does that mean you go buy from someone who's more expensive?"

Although most of the data gathered by the PUC is confidential, the agency is required to submit summary findings and analysis of the data it has gathered before the next legislative session starts in January.

The PUC said it has had difficulty staffing newly created oil industry monitoring positions and that it could be a year before the agency installs a new database that will allow more efficient analysis of oil industry data.

Meanwhile, Hawai'i's gasoline prices continue to move in ways that seem out of step with the rest of the nation. Since Nov. 1, the average price for regular gasoline nationwide has risen 8 cents a gallon, according to the AAA Daily Fuel Gauge Report. The Hawai'i average has risen 28 cents a gallon over the same period.

"There has to be a way that (oil industry profit) data can be reported ... and put into a report that tells you and me and every other consumer in this state whether the pricing system is working fairly," Caldwell said.

Reach Sean Hao at shao@honoluluadvertiser.com.

Make a difference. Donate to The Advertiser Christmas Fund.