Gas Prices

Hawaii made the national news today with the announcement of the first gas price regulations (called the gas cap) in the country. It was even reported in California, a state with similar prices for gas and other cost of living expenses. Without going into the politics of regulation, I think the intent of the gas cap is to align wholesale prices to those on the mainland in order to keep the two local refiners (on Oahu) from profiting from their geographical monopoly.

I took this picture yesterday in Kapaa, thinking that it might be the last time I see gasoline prices under $3 per gallon here. The gas cap price set for the island of Kauai this week could theoritically bring it down to $2.92 (2.80 wholesale cap price + 0.12 average station markup).

Regular unleaded at $2.999 at the Kapaa Shell station

Some other comments related to this photo:

  1. For comparison, a gallon of regular unleaded cost just under $2 for a brief time after we moved here 2 years ago.
  2. Unlike Chevron, the Shell stations on Kauai tend to be among the cheapest, and you can get another 5% off by using their no-fee credit card. I usually wouldn’t endorse using a credit card, but all prices are set to take into account their processing fee, so it pays to play the system. I pay cash at businesses I care about.
  3. I loathe the nine-tenths of a penny fraction added to gas prices. It’s shameful psychological manipulation that this world could do without. It should be illegal to charge a price that is not reflected in the legal currency.
  4. The strings of pennants on the Shell sign are relatively new and ostensibly placed around the sign. I wonder if the’re meant to obscure the price. They are also meant to attract attention. Many businesses in Hawaii use flags and banners to circumvent the restrictions on outdoor signage. As a matter of fact, the gas stations already get a break because the mandatory price sign is bigger than any other free-standing sign allowed.
Printed from:
© 2020.


  1. Mark says:

    Depending on how it’s paid for, capping gas prices could be a way to dampen what is generally the equivalent of a highly regressive tax (higher percentage of income paid by the poor than the rich). Or it could be an additional regressive tax, getting people who cannot afford it to help pay for people with huge gas guzzlers.

    The interesting bit I remember from Critical Path was the 1980 vintage calculation that manufacturing a gallon of gas would cost on the order of $1 trillion. So in some sense the cap is only about $999,999,997 too low.

  2. Jim says:

    Gas in Austin is only $2.49 last time I looked. But it is on its way to $3.00 this year I have read and maybe $5 in two years. Tax per gallon is 20 cents set in 1991. We don’t have enough gas tax income to pay for the roads we need, we have only about a third. So if our legislature ever gets their act together we could easily have good roads again and maybe some gas conservation too.

    I don’t see any reason to cap the price, the more expensive it gets the more likely people will use it rationally. I have read the Americans will not change their gas usage habits until it goes over $5. I did see congress start to set miles/gallon requirements on SUV last week. A step in the right direction.

  3. Andy says:

    Without getting too political, I too think that in the long term, higher gas prices better reflect the true cost of extracting and burning oil, and will modify behavior. However, in the short term, it is clear that it hurts the poorest the most, and the extra money makes the oil corporation richer without providing any alternative mass-transit as a tax could.

RSS feed for comments on this post

Leave a Comment