The Public Utilities Commission likely will set the wholesale price cap for unleaded regular gasoline on O'ahu at $2.74 today, and it could lead to higher prices at the pump starting Sept. 1.

Hawai'i will have the nation's only government-imposed restrictions on gasoline prices beginning next month, and today is when the PUC is scheduled to list the price limits on its Web site. The price caps will be adjusted weekly — on Wednesdays — and take effect the following week.

Based on The Advertiser's calculations, the wholesale cap will be $2.74 including 58 cents in taxes. That is almost equal to the average retail price of nearly $2.75 a gallon for regular gasoline in Honolulu yesterday. Assuming retailers add a markup, the price consumers pay at the pump will be higher under the gas cap.

No one knows what will happen to pump prices when the caps take effect because it only caps wholesale prices. However, if wholesalers charge the highest prices allowed under the law and retailers maintain an estimated 12 cents a gallon markup, the price cap could lead to a jump at the pump to $2.86 a gallon.

Frank Young, a member of consumer advocacy group Citizens Against Gasoline Price Gouging and a price-cap proponent, estimated that retail prices could rise to $2.81 a gallon if wholesale prices were set at $2.74 a gallon. That's 6 cents higher than yesterday's average.

"I think things are going to be much more normal than people first thought," Young said. "You just have to be patient and let it run its course."

The wholesale cap likely to be announced today is less than the price set last week when the PUC did a "dry run" of the new gas-cap formula. The drop in the price ceiling is a result of a recent decline in wholesale gasoline prices in Los Angeles, New York and the Gulf Coast — which serve as the basis for the Hawai'i caps. That drop in Mainland prices coupled with a more than 6 cents a gallon jump in average retail prices in Honolulu during the past week means that any potential increase in pump prices on Sept. 1 may be less severe than predicted last week.

Also yesterday, the PUC denied requests by Tesoro Petroleum Corp., the Hawaii Petroleum Marketers Association, Chevron Corp. and Shell Oil Co. that the price cap regulations be reconsidered or postponed.

Last month the PUC, which administers the cap, wrote Gov. Linda Lingle and legislative leaders warning that price controls could lead to supply shortages and a refinery closure. Economists and state consultants also have warned repeatedly that price caps could drive up prices.

Under the law, Lingle can suspend the cap if there is a major adverse impact on the economy, public welfare or the health and safety of people.

Reach Sean Hao at shao@honoluluadvertiser.com.