Tough Questions and Straight Answers
About Hawaii Gasoline Prices

News release from the Western States Petroleum Association

The members of the Western States Petroleum Association realize that consumers have asked a lot of tough questions lately about gasoline prices. We offer the following information to foster a healthy public dialogue on these issues.

Why are gasoline prices in Hawaii generally higher than in other states?

For one thing, gasoline taxes here are the highest in the nation, nearly 55 cents per gallon. Hawaii consumers pay more than $210 million in gasoline related taxes each year: $70 million in federal gas taxes, $60 million in state gas taxes, $20 million in general excise taxes and $63 million in county gas taxes. Source: State Department of Business and Economic Development.

Among the other reasons cited by the State of Hawaii’s non-partisan consultants for generally higher prices are the higher cost of living and doing business in Hawaii, and the higher intrinsic costs of refining and distribution of gasoline. Further, according to the Federal Trade Commission, anti-competitive laws passed by the Hawaii Legislature “tend to reduce retail supply and increase retail prices.” These laws include rent caps for stations operated by dealers and a ban on opening new company-operated stations near existing dealer-operated stations.

Are petroleum company profits excessive in Hawaii?

Not according to the state’s non-partisan consultants. They said: “Despite high margins in gasoline, and contrary to public perception, the petroleum industry overall does not realize excess profits.”

How do gasoline prices compare to the costs of other products?

According to the Tax Foundation of Hawaii, gasoline prices here have risen far less than for many other products we use every day, such as electricity, food, housing and medical care. (Price Comparisons 1991 to 2001. Source: Tax Foundation of Hawaii)

What’s the impact of Hawaii’s gasoline price cap law?

According to local and national experts, Hawaii’s gasoline price cap law is fatally flawed because it will decrease competition, increase the likelihood of gasoline shortages and tend to increase gasoline prices. According to the most recent report by the state’s consultants, “recent analysis suggests that [the price caps] would increase consumer costs.”

And everyone concerned is aware of the negative consequences. According to the non-partisan report: “All Stakeholders, including the legislators who sponsored the bill, consider the current price cap structure… seriously flawed and realize that implementation as is may result in higher prices for consumers, an even more restrictive competitive landscape at the supplier level and loss of consumer choices in the remote service areas.”

The Western States Petroleum Association (WSPA) is a non-profit trade association that represents approximately 30 companies that account for the bulk of petroleum exploration, production, refining, transportation and marketing in the six western states of Arizona, California, Hawaii, Nevada, Oregon and Washington. Founded in 1907, WSPA is the oldest petroleum trade association in the United States.

DCCA Cuts Business Fees Again

Starting November 1, 2005, the Department of Commerce and Consumer Affairs’ (DCCA) Business Registration Division (BREG) implemented a one-time only reduction of securities and franchise filing fees. This will result in a total savings of more than $2 million dollars for Hawaii businesses.

Due to Hawaii’s robust economy, the Department’s revenues are expected to exceed the necessary expenses for operations in FY06. As a result, the Department is lowering fees for securities and franchise filings with BREG. The filings fees will be lowered by 50% for application and renewal fees for securities dealers and their salespeople, investment advisors and their representatives, the initial notice filing and renewal fees for investment company securities, and the application, amendment and renewal fees for franchise filings.

The reduction is one-time only for one-year. The fees will automatically readjust to the statutory fee on November 1, 2006. The fee reduction will bring operational revenues more in line with the operational cost of the division.

“With Hawaii’s vibrant economy on track, we are lowering our fees to reduce the cost of doing business in the state,” said DCCA Director Mark Recktenwald. “The fee cuts are part of the Lingle-Aiona Administration’s efforts to create a more business-friendly environment in the state.”

Since January 2003, DCCA has cut fees and assessments for businesses by more than $10 million. DCCA cut fees by 25 percent for people who set up new businesses or who file their annual corporate reports online. This past year, the Department increased those cuts by an additional 25 percent, and extended them to those who file by paper as well as those who file online.

Minimum Wage Increases January 1

Beginning January 1, 2006 Hawaii’s current minimum wage increases from $6.25 to $6.75 an hour. A year later, January 1, 2007, the wage goes up to $7.25 per hour. The current federal minimum wage is $5.15 an hour.

Creative-1 Wins Platinum Award

Creative-1 and Bob Sigall was a Platinum Award winner in the 2005 MarCom Creative Awards for Lex Brodie’s “Thank You Very Much Award.”

The awards honor excellence in marketing and communication and are mostly given to PR firms and ad agencies.

MarCom honors excellence in marketing and communications every year.

About 15% of the 4600 entries were given the highest, Platinum award. More info can be found at: http://www.marcomawards.com

I’ll be getting a statuette in 4-6 weeks that they say are individually cast by the same company that makes the Oscars and Emmy’s. Each is 13 inches tall on a hardwood base.

December 2005 SB News Front Page

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Copyright 2005 Small Business Hawaii. Last update: November 28, 2005