HONOLULU--State Senator Gordon Trimble (R, 12th District) has submitted two bills designed to address the problem of exorbitant gas prices in Hawaii. "The bills provide a more effective means of lowering the cost of fuel than the gas price cap passed by the Legislature in 2002 that is now under review by the Legislature and the Lingle Administration," Trimble said.

The first, Senate Bill No. 1475, would tax profiteering on gasoline sales. Trimble’s proposed windfall profits tax directly targets the high prices resulting from a lack of competition in Hawaii’s gasoline market, which is dominated by the two local refiners, Chevron and Tesoro.

Trimble said that a specific formula would be developed through deliberations in the legislature and consultation with the administration. One possibility would be to tax the difference between profit levels in the Hawaii market and those on the mainland. Another would base the tax on the difference between prices of locally refined gasoline and imported refined products.

"Either formula would be simpler to calculate than the complicated gas cap legislation, and the second alternative would not depend on accounting information from the refiners which can be subject to manipulation," Trimble said.

Trimble asserted that this legislation would produce one of two results: either substantial new revenues for the state - between $50 and $100 million a year depending on the rate chosen for the tax - or lower prices to consumers if the suppliers wish to avoid paying the windfall taxes. "Either way," he said, "we will be able to keep in Hawaii money that now leaves the state as excess profits for the oil companies."

The second bill, Senate Bill No. 1537, is designed to stimulate competition at the retail level. It would repeal a provision of existing law prohibiting oil companies from constructing service stations within an eighth of a mile of an existing dealer-operated station.

"This provision, originally intended to protect stations operated by individual owners, has actually helped sustain high gasoline prices by limiting head-to-head competition between neighboring stations," Trimble emphasized. "This is precisely the kind of excessive government regulation that needs to be eliminated," Trimble said. "The state should be increasing competition in the marketplace, not restricting it. If we are going to pressure the oil companies to be more competitive through the windfall profits tax, we should also allow them to compete by constructing new stations in the most desirable locations," Trimble concluded.