| On Hawaii’s Gasoline
Price Cap Law: |
| |
| “Implementation of
the price caps is not recommended.” |
Report for State of Hawaii Department
of Business,
Economic Development and Tourism
by Stillwater Associates, August 2003 |
| |
| “The price caps are
not expected to have any significant benefit effect
for Hawaii’s gasoline consumers. In fact,
recent analysis suggests that they would increase
consumer costs.” |
Report for State of Hawaii Department
of Business,
Economic Development and Tourism
by Stillwater Associates, August, 2003 |
| |
| “Historical experience
demonstrates that price controls tend to create
shortages, reduce quality, and generate other
inefficiencies.” |
Office of Policy and Planning
Federal Trade Commission
Testimony before the Hawaii Legislature
January 28, 2003 |
| |
“An extensive evaluation
of price caps implemented in other markets has
failed to identify examples where clear consumer
benefits were achieved. To the contrary, many
examples were found in which the price caps resulted
in clear disadvantages to the consumer.” |
Report for State of Hawaii Department
of Business,
Economic Development and Tourism
by Stillwater Associates, August, 2003 |
| |
| “Ultimately, the price
cap will be a failure. It may increase the volatility
of gas prices, but it will not lower them….
Rather than regulate prices, we should make the
industry more competitive by reducing barriers to
entry, making it easier for retailers to obtain
refined product from outside the state. At the retail
level, let's eliminate the rules that make opening
new gas stations difficult.” |
Professor Jack Suyderhoud
University of Hawaii-Manoa
Commentary, Honolulu Star-Bulletin, July 14, 2002 |
| |
| “A likely impact of
price caps is that essential fuel services in rural
areas would significantly decline and, potentially,
disappear.” |
Report for State of Hawaii Department
of Business,
Economic Development and Tourism
by Stillwater Associates, August 2003 |
| |
| “Price controls are
tried over and over again, and they can lead to
some pretty bad unintended consequences.” |
Christopher Grandy, Ph.D.
University of Hawaii Economic Research Organization
Honolulu Star Bulletin, October 23, 2002 |
| |
| “Caps cannot protect
consumers…in the end, consumers will pay higher
prices, Hawaii will get a bad name and the world
oil market will remain volatile. The gas cap should…be
repealed.” |
Fereidun Fesharaki, Senior Fellow
East-West Center
Commentary, Honolulu Star-Bulletin, July 14, 2002 |
| |
| “A significant body
of research and experience suggests that price controls
have a poor record of improving consumer welfare
in markets where competition is possible, and may
in fact cause more harm than good in the long term.” |
Office of Policy and Planning
Federal Trade Commission
Testimony before the Hawaii Legislature
January 28, 2003 |
| |
| “The U.S. experience
with gasoline price controls in the 1970s confirms
the predictions of economic reasoning…Customers
queued up at gasoline stations are perhaps the most
visible example of the inefficiencies resulting
from the shortages created by gasoline price controls,
but myriad other examples actually occurred during
this period: limited station hours, Sunday station
closures, “odd-even” purchasing restrictions
based on license plate numbers, and restrictions
on the number of gallons the customer could purchase
in a single trip to the gasoline station.” |
Office of Policy and Planning
Federal Trade Commission
Testimony before the Hawaii Legislature
January 28, 2003 |
| |
| “This means that
under this legislation innovations are less likely
to be undertaken in Hawaii, and Hawaii as a whole
will become less competitive in the global economy.” |
Christopher Grandy, Ph.D.
University of Hawaii Economic Research Organization |
| |
| “The price caps project
an anti-business image for the State of Hawaii,
which is detrimental to the investment climate in
general and to the specific investments in Hawaii’s
energy infrastructure in particular.” |
Report for State of Hawaii Department
of Business,
Economic Development and Tourism
by Stillwater Associates, August 2003 |
| |
| “The gas cap will definitely
not protect consumers or lower prices.” |
Professor Jack Suyderhoud
University of Hawaii-Manoa
Commentary, Honolulu Star-Bulletin, July 14, 2002 |
| |
| On Gasoline Marketing
Laws In Force in Hawaii: |
| |
| “The current divorcement
legislation should be repealed.” |
Report for State of Hawaii Department
of Business,
Economic Development and Tourism
by Stillwater Associates, August 2003 |
| |
“Several features of
Hawaii’s market tend to reduce retail supply
and increase retail prices, including rent caps
for stations operated by lessee-dealers and a retail
“anti-encroachment” law restricting
marketers’ ability to open new company-operated
stations near existing dealer-operated stations.” |
Office of Policy and Planning
Federal Trade Commission
Testimony before the Hawaii Legislature
January 28, 2003 |
| |
| “Extensive studies
in other gasoline markets show that this type of
regulation is anti-competitive and has, over time,
resulted in higher prices.” |
Report for State of Hawaii Department
of Business,
Economic Development and Tourism
by Stillwater Associates, August 2003 |
| |
| “… Hawaii’s
law prohibiting “encroachment” (and
its predecessor “divorcement” law) constrain
the ability of both incumbents and new entrants
to establish new stations.” |
Office of Policy and Planning
Federal Trade Commission
Testimony before the Hawaii Legislature
January 28, 2003 |
| |
“Published economic
research demonstrates that anti-encroachment and
divorcement laws tend to increase retail gasoline
prices.” |
Office of Policy and Planning
Federal Trade Commission
Testimony before the Hawaii Legislature
January 28, 2003 |
| |
| “… the FTC warned
in 1985 that the divorcement law already under discussion
in Hawaii would unquestionably increase the costs
of gasoline distribution, eliminate legitimate price
competition, and raise prices for motor fuel to
consumers.” |
Office of Policy and Planning
Federal Trade Commission
Testimony before the Hawaii Legislature
January 28, 2003 |
| |
| “The divorcement legislation
has not brought any real benefits to Hawaii. Over
time, divorcement has led to higher prices for consumers.”
|
Report for State of Hawaii Department
of Business,
Economic Development and Tourism
by Stillwater Associates, August 2003 |
