Rep. Case and Democrats Misled Public on Gas Cap Study

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House and Senate Republicans lashed out at Congressman Ed Case
and a Democrat support group [Tuesday] for distributing false information on
Hawaii’s gas prices on Monday.

Case and the group were responding to a report by an independent
company, Stillwater Associates, which revealed that the gas cap law
enacted by the Democrat-controlled Legislature last year would hurt
consumers instead of lowering costs as claimed by Democrats and
Congressman Case. Case and a group made up of Democrat supporters argued
yesterday that the report was developed to favor Republican efforts to
repeal the gas cap. The report, however, was commissioned by a
Democrat-led Legislature and Democrat Gov. Ben Cayetano approved the
contract award.


“The Democrats lied about comparative costs of gas. The legislation is
flawed,” said Senate Republican Leader Fred Hemmings
(R-Kailua/Waimanalo). “During the election they printed outright lies
about Republicans on this issue. The Democrats under the leadership of
Ben Cayetano commissioned the Stillwater report, and now they’re trying to renounce the truth. They are having a press conference today at 1
p.m. In view of their documented falsehoods on this issue, you can’t
believe a thing they say. This is a sham and a partisan issue set up for
political gain at the expense of the people of Hawaii.”

To solve the problem, Case proposed that the state create a new tax on
gas producers in Hawaii. Honolulu residents currently pay the highest
gas taxes in the nation. Case’s tax increase would send gas prices even

Stillwater studied Hawaii’s gasoline market, refinery profitability,
retail profitability, and price caps worldwide.

“Legislators who voted against the gas cap were right,” said House
Republican Floor Leader Colleen Meyer (R-Kaneohe/Laie). “The report
vindicates their vote to protect the consumer from irresponsible
regulatory legislation.”

The report said history has proven that price controls inevitably led to
fuel shortages and higher prices. The gas cap legislation is based on
California wholesale prices, which have been more volatile — and higher
— than prices in Hawaii. For the past year, Hawaii residents would have
paid more for gas under the gas cap legislation if the law was enacted

Case believes oil could be brought into Oahu and sold at a profit for
about $1.50/gal. David Hackett of Stillwater, however, pointed out that
Hawaii has neither the storage facilities nor the infrastructure to
provide gas to retail dealers.

Republicans are for lower prices at the pump and for the consumer who
needs gas to go to school or work and for the businesses who must pick
up and deliver. But price caps are not the way to go. The report said that import prices are competitive, but that the state might encourage greater competition downstream, a system that has proved effective in other jurisdictions. Stillwater pointed out this can be achieved through better oversight and monitoring, without the need for heavy-handed government controls. We don’t need an Oil Commissar dictating prices in Hawaii.
Instead, what might help is greater competition — of the type provided by

Frank Young, a disgruntled former Chevron dealer and now spokesperson
for a group against the Stillwater study said that Republicans accepted
donations from gas companies. He failed to mention that 48 Democrat
candidates and Democrat groups also received campaign donations from gas
companies. Ten Democrats also voted against the gas cap.

”’Barbara Marumoto is a Republican state Representative from the Kaimuki and Kahala districts.”’