Gas Cap Law

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The Hawaii Gas Cap Law is a state law setting a legal limit on wholesale gasoline prices, or the maximum amount that may be charged for producing gasoline and delivering it to a service station. Under the law, the gas cap is set weekly by the Hawaii Public Utilities Commission (PUC) based on average spot prices for regular unleaded gasoline in three U.S. markets, New York Harbor, the Gulf Coast, and Los Angeles.

The gas cap has a baseline price that is the same throughout Hawaii, but the total wholesale price varies depending on seven zones, reflecting the differing costs of delivery to various locations throughout the state.

Law suspended

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On May 5, 2006, Gov. Linda Lingle (in office, 2002-2010) signed a bill suspending the gas cap law. The bill allows Hawaii's governor to reinstate the gas cap law at any time. The suspension of the law is expected to increase profits for oil companies but the impact on gasoline prices is uncertain.

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