The Public Utilities Commission yesterday said Hawai'i's wholesale gasoline price cap will jump 44 cents on Monday, which could mean a continued sharp rise in pump prices next week.

The maximum wholesale price for regular on O'ahu will rise from $3.04 a gallon this week to about $3.50 a gallon, including taxes, starting Monday. Hawai'i's gas cap, the only one in the nation, limits what wholesalers can charge, but not retailers. Gas stations typically add about 12 cents to the wholesale price.

Monday's hike will come on the heels of this week's 27-cent increase in the wholesale cap, which was followed by an approximately 22-cent increase in retail prices to between $3.10 to $3.18 a gallon for regular.

If wholesalers charge the highest prices allowed by law, retail prices on O'ahu could reach $3.60 a gallon or more, while Neighbor Island prices could approach $4 a gallon. The caps don't require wholesalers to price at the maximum allowed.

Some local economists said it's unlikely wholesalers will raise prices by the full 71 cents a gallon that the price caps will allow over a two-week period.

"I would expect them to take some of that," said Jack Suyderhoud, a business economics professor at the University of Hawai'i-Manoa. However, "I wouldn't expect retail prices to move the same amount because it's such an artificial price" increase.

For the next 12 days at least, prices under the cap are likely to rise because of the drastic jump in Mainland prices in the wake of Hurricane Katrina. The caps tie Hawai'i's prices to prices in Los Angeles, the Gulf Coast and New York.

While gasoline prices are up under the gas cap, supporters point out prices are rising even faster on the Mainland.

Since Hawai'i's price cap took effect Sept. 1, the average price for regular in Honolulu has risen nearly 15 cents to an average of about $3 on Tuesday, according to the AAA Fuel Gauge Report. The nationwide average retail price for regular has risen 36 cents in the same period to $3.042 a gallon.

Democrats who pushed for the gas cap have said the goal was to make Hawai'i prices fair by linking them to Mainland prices. The caps are expected to drive local prices up when Mainland prices rise, then force prices to fall when Mainland prices decline.

"Katrina has affected the petroleum market globally, not just in the United States," said House Majority Leader Marcus Oshiro, D-39th (Wahiawa), in a news release. "Once the market stabilizes, our prices will start to come down, tracking the national averages. That never happened before we had the price cap."

Meanwhile, Republicans who opposed the caps, said in a news release yesterday that the law should be repealed before next week's possible spike in gasoline prices.

"We've always been wanting to see the repeal happen, but it's basically in the Democrats' hands," said House Minority Leader Lynn Finnegan, R-32nd (Aliamanu, Airport, Mapunapuna). "There will eventually be a time when the public will demand it to be repealed."

Reach Sean Hao at shao@honoluluadvertiser.com.