Gas-price caps

(Newark, N.J.) Star-Ledger

Investigations into gasoline pricing have been around as long as there have been sharp spikes in the price of fuel. Thursday there will be another as the Assembly Transportation Committee looks into the past month's punishing, 80-cent-a-gallon increase in the price of regular.

The hearing is welcome even if, as seems likely, chairman John Wisniewski, D-Middlesex, and fellow lawmakers won't be able to shove prices back to $1.50 a gallon.

Still, the committee can provide a refresher course on the vagaries of the gas market, including the curious way that prices go up with head-snapping speed but move back down at a molasses-like pace or that some major oil companies charge far different wholesale prices to station owners just a few miles apart, even though the same tanker truck is delivering the same gas to each.

Price caps are usually a bad idea, most often reducing supply rather than providing long-term consumer relief. But Garden State lawmakers can explore Hawaii's experience. The Aloha State enacted the first wholesale price cap on gasoline earlier this month.

The cap was proposed long before Hurricane Katrina as a brake on the islands' traditionally high gasoline prices. So far, there is no evidence it is working; Hawaii yesterday had the second-highest average price for unleaded in the nation at $3.276 a gallon.

But with pressure mounting nationwide for action, Trenton should give the price cap strategy a full debate.

If lawmakers manage to figure out some way to drive down gas prices, they will make their own legislative lives a lot easier. At some point, Trenton will have to deal with whether the state's third-lowest-in-the-nation gasoline tax should be raised to replenish the road and mass transit repair fund.