Hawaii First State To Cap Gasoline Prices

[zendari]

Text

HONOLULU -Hawaii has become the first state in the nation to set limits on gasoline prices.

The state Public Utilities Commission is setting the wholesale price ceiling for gasoline in Honolulu at just under $2.16 a gallon.

With taxes, the wholesale price would be $2.74. If wholesalers charge that price and retailers keep their typical 12-cent markup, then the price of a gallon of regular unleaded in Honolulu could rise to $2.86 per gallon.

The caps apply as of next week, when a new law goes into effect allowing Hawaii to set a maximum wholesale price at which gasoline can be sold. The limit is based on the weekly average of spot prices in Los Angeles and New York, and on the U.S. Gulf Coast.

The law doesn't put a cap on retail prices.

Gas prices in Hawaii are the highest in the country. The statewide average of the retail price of a gallon of regular unleaded Wednesday reached a record-high of $2.84. The AAA said that's 4 cents higher than in California.

Hawaii Gov. Linda Lingle said she's poised to repeal the gas cap if it somehow ends up costing motorists more. The governor said she would be checking gas price points to see if there are any gas shortages before she makes up her mind about repealing it.



Well I guess Hawaii will become the first state to experience rationing and long lines. Maybe they can learn to walk to work, or take a sailboat.

 

[ntdz]

How does that work? How can they artifically set gas caps? Will the companies just stop sending gas there if it's not profitable?

 

[Rainsford]

Originally posted by: ntdz
How does that work? How can they artifically set gas caps? Will the companies just stop sending gas there if it's not profitable?

In theory, although I should point out that the economic theory really only works if the sharp rise in prices lately is due to market forces and not some equally artificial thing on the oil companies' side (like price fixing). I don't follow the oil market enough to say either way, but I doubt selling gas will become unprofitable even with a cap.

 

[5LiterMustang]

Originally posted by: Rainsford

Originally posted by: ntdz
How does that work? How can they artifically set gas caps? Will the companies just stop sending gas there if it's not profitable?

In theory, although I should point out that the economic theory really only works if the sharp rise in prices lately is due to market forces and not some equally artificial thing on the oil companies' side (like price fixing). I don't follow the oil market enough to say either way, but I doubt selling gas will become unprofitable even with a cap.

That depends on how hawaii gets their gas. If there is a custody transfer from the producer/refiner to a wholeseller then if hte wholeseller no longer makes money you better believe they'll quit selling gas in hawaii. Oil companies that produce and sell gas in hawaii (if any) may not have a problem, they should remain profitible.

 

[DealMonkey]

I guess it's similar to capping prescription drug prices in Canada. You don't see the big pharmas deciding to not sell prescription drugs up north do you? Nope, you sure don't.

 

[ShadesOfGrey]

Originally posted by: DealMonkey
I guess it's similar to capping prescription drug prices in Canada. You don't see the big pharmas deciding to not sell prescription drugs up north do you? Nope, you sure don't.

Drugs are a traded commodity?

 

[Rainsford]

Originally posted by: 5LiterMustang

Originally posted by: Rainsford

Originally posted by: ntdz
How does that work? How can they artifically set gas caps? Will the companies just stop sending gas there if it's not profitable?

In theory, although I should point out that the economic theory really only works if the sharp rise in prices lately is due to market forces and not some equally artificial thing on the oil companies' side (like price fixing). I don't follow the oil market enough to say either way, but I doubt selling gas will become unprofitable even with a cap.

That depends on how hawaii gets their gas. If there is a custody transfer from the producer/refiner to a wholeseller then if hte wholeseller no longer makes money you better believe they'll quit selling gas in hawaii. Oil companies that produce and sell gas in hawaii (if any) may not have a problem, they should remain profitible.

Interesting point...like I said, I don't follow the oil/gas markets very closely.

 

[charrison]

Originally posted by: ntdz
How does that work? How can they artifically set gas caps? Will the companies just stop sending gas there if it's not profitable?

I hope everyone is ready for waiting lines for gas. If it is not profitable, they will stop selling it.

 

[BoberFett]

Originally posted by: DealMonkey
I guess it's similar to capping prescription drug prices in Canada. You don't see the big pharmas deciding to not sell prescription drugs up north do you? Nope, you sure don't.

Not that drug prices are in any way, shape or form like gas prices, but...

The drug companies continue to sell drugs to Canada because they can continue to soak us here in the US to make up for their pathetic profits in the north. If the US also enacted drug price controls it's hard to say what would happen. The pharma corps could choose to limp along on essentially government mandated profit margins, scale back their marketing (which I wouldn't mind at all) or they could cut R&D. You guess what their choice will be.

 

[Vic]

Heh. I wish them luck.

What exactly is the market price of a good when there is no market?

 

[ntdz]

Originally posted by: DealMonkey
I guess it's similar to capping prescription drug prices in Canada. You don't see the big pharmas deciding to not sell prescription drugs up north do you? Nope, you sure don't.

Thats totally different. Once the drug is researched and developed, there is very minimal manufactoring costs. They would lose money not selling it there, even under the reduced prices. With gas, there is always high "manufactoring costs," if thats what you want to call them. For that reason, if the price of crude rises above a threshold to be profitable under the gas cap, companies likely will just stop selling there.

 

[cwgannon]

Originally posted by: zendari

...

Topic Summary: "a 2nd US state declared a socialist body"

A bit of a reactionary, are we?

 

[cKGunslinger]

Originally posted by: cwgannon

Originally posted by: zendari

...

Topic Summary: "a 2nd US state declared a socialist body"

A bit of a reactionary, are we?

That's called "mockery," I believe

 

[Whaspe]

Originally posted by: zendari
Text

HONOLULU -Hawaii has become the first state in the nation to set limits on gasoline prices.

The state Public Utilities Commission is setting the wholesale price ceiling for gasoline in Honolulu at just under $2.16 a gallon.

With taxes, the wholesale price would be $2.74. If wholesalers charge that price and retailers keep their typical 12-cent markup, then the price of a gallon of regular unleaded in Honolulu could rise to $2.86 per gallon.

The caps apply as of next week, when a new law goes into effect allowing Hawaii to set a maximum wholesale price at which gasoline can be sold. The limit is based on the weekly average of spot prices in Los Angeles and New York, and on the U.S. Gulf Coast.

The law doesn't put a cap on retail prices.

Gas prices in Hawaii are the highest in the country. The statewide average of the retail price of a gallon of regular unleaded Wednesday reached a record-high of $2.84. The AAA said that's 4 cents higher than in California.

Hawaii Gov. Linda Lingle said she's poised to repeal the gas cap if it somehow ends up costing motorists more. The governor said she would be checking gas price points to see if there are any gas shortages before she makes up her mind about repealing it.



Well I guess Hawaii will become the first state to experience rationing and long lines. Maybe they can learn to walk to work, or take a sailboat.

Hmm... everyone fail to read this?

 

[5LiterMustang]

Originally posted by: Whaspe

Hmm... everyone fail to read this?

Read my post

 

[BaliBabyDoc]

Originally posted by: BoberFett

Originally posted by: DealMonkey
I guess it's similar to capping prescription drug prices in Canada. You don't see the big pharmas deciding to not sell prescription drugs up north do you? Nope, you sure don't.

Not that drug prices are in any way, shape or form like gas prices, but...

The drug companies continue to sell drugs to Canada because they can continue to soak us here in the US to make up for their pathetic profits in the north. If the US also enacted drug price controls it's hard to say what would happen. The pharma corps could choose to limp along on essentially government mandated profit margins, scale back their marketing (which I wouldn't mind at all) or they could cut R&D. You guess what their choice will be.

I hear this often . . . and it's nearly always wrong. Drug companies are indeed soaking American consumers (and government) but they make MORE than pathetic profits in Canada. Most drugs are extremely easy to manufacture and cheap now that production has shifted away from the US (and even the EU). Furthermore, one or two blockbusters are often enough to drive an entire companies R&D. Granted, the lion's share of profits come from the US.

More intriguingly, the off-label use of drugs alone is approximately equal to the entire R&D budget of the pharmaceutical industry (~$14B) . . . which is also in the ballpark of their advertising budget. In essence, if drug companies stopped advertising they could DOUBLE R&D or dramatically cut prices.

Biologics are a different issue. In general, production costs are quite high. R&D into next generation biologics would likely decrease if companies could no longer anticipate "mother lode" type returns in the US market.

 

[zendari]

Drug companies also do great things for the people. For example, Merck makes essentially no profit on its AIDS drugs, Crixivan and Stocrin.

Text

 

[BaliBabyDoc]

Originally posted by: zendari
Drug companies also do great things for the people. For example, Merck makes essentially no profit on its AIDS drugs, Crixivan and Stocrin.

Text

Nice . . . old link . . . as a generalization . . . Yes, drug companies have indeed done some great things. Unfortunately, their business model is primarily driven by profit . . . not a desire to great things for the people.

Merck actually has a radio ad were the announcer muses, "Merck . . . putting patients first." Alas, if they had really done that back in 1997-1999 . . . they would have a product (Vioxx) that sold well ($300-400M a year) to a "limited" and appropriate market. Instead, they've got billions in liability. Oh well.

 

[dmcowen674]

Originally posted by: charrison

Originally posted by: ntdz
How does that work? How can they artifically set gas caps? Will the companies just stop sending gas there if it's not profitable?

I hope everyone is ready for waiting lines for gas. If it is not profitable, they will stop selling it.

Cool, means more gas over here. :thumbsup:

 

[5LiterMustang]

Originally posted by: BaliBabyDoc

Originally posted by: zendari
Drug companies also do great things for the people. For example, Merck makes essentially no profit on its AIDS drugs, Crixivan and Stocrin.

Text

Nice . . . old link . . . as a generalization . . . Yes, drug companies have indeed done some great things. Unfortunately, their business model is primarily driven by profit . . . not a desire to great things for the people.

Merck actually has a radio ad were the announcer muses, "Merck . . . putting patients first." Alas, if they had really done that back in 1997-1999 . . . they would have a product (Vioxx) that sold well ($300-400M a year) to a "limited" and appropriate market. Instead, they've got billions in liability. Oh well.

so what? profit drives research for tomorrows drugs...why is this hard for people to understand? you could use that same backward logic for anything...

Well car manufacturers should not be allowed to make profit because cars are essential today.
Grocery stores shouldn't be allowed to make money because they sell essential goods that many would go hungry without.
Drug companies shouldn't be driven by profit because they make drugs that save peoples lives.

WTF, seriously thats ridiculous they're companies IN BUSINESS TO MAKE MONEY!

 

[vi edit]

Yeh, that worked GREAT for California utilities!

 

[Vic]

Originally posted by: vi_edit
Yeh, that worked GREAT for California utilities!

:laugh:

 

[charrison]

Originally posted by: BaliBabyDoc

Originally posted by: zendari
Drug companies also do great things for the people. For example, Merck makes essentially no profit on its AIDS drugs, Crixivan and Stocrin.

Text

Nice . . . old link . . . as a generalization . . . Yes, drug companies have indeed done some great things. Unfortunately, their business model is primarily driven by profit . . . not a desire to great things for the people.

Merck actually has a radio ad were the announcer muses, "Merck . . . putting patients first." Alas, if they had really done that back in 1997-1999 . . . they would have a product (Vioxx) that sold well ($300-400M a year) to a "limited" and appropriate market. Instead, they've got billions in liability. Oh well.

A business model driven by profit? No kidding? Is there any other point of business?

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love "

-- Adam Smith

 

[ShadesOfGrey]

Originally posted by: charrison

Originally posted by: BaliBabyDoc

Originally posted by: zendari
Drug companies also do great things for the people. For example, Merck makes essentially no profit on its AIDS drugs, Crixivan and Stocrin.

Text

Nice . . . old link . . . as a generalization . . . Yes, drug companies have indeed done some great things. Unfortunately, their business model is primarily driven by profit . . . not a desire to great things for the people.

Merck actually has a radio ad were the announcer muses, "Merck . . . putting patients first." Alas, if they had really done that back in 1997-1999 . . . they would have a product (Vioxx) that sold well ($300-400M a year) to a "limited" and appropriate market. Instead, they've got billions in liability. Oh well.

A business model driven by profit? No kidding? Is there any other point of business?

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love "

-- Adam Smith

:thumbsup:

 

[Vic]

Originally posted by: charrison

Originally posted by: BaliBabyDoc

Originally posted by: zendari
Drug companies also do great things for the people. For example, Merck makes essentially no profit on its AIDS drugs, Crixivan and Stocrin.

Text

Nice . . . old link . . . as a generalization . . . Yes, drug companies have indeed done some great things. Unfortunately, their business model is primarily driven by profit . . . not a desire to great things for the people.

Merck actually has a radio ad were the announcer muses, "Merck . . . putting patients first." Alas, if they had really done that back in 1997-1999 . . . they would have a product (Vioxx) that sold well ($300-400M a year) to a "limited" and appropriate market. Instead, they've got billions in liability. Oh well.

A business model driven by profit? No kidding? Is there any other point of business?

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love "

-- Adam Smith

:shocked: