The end of Hawai'i's controversial gasoline price cap seemed more certain yesterday after Senate leaders offered a compromise that could pave the way for a repeal of the law.

Sen. Ron Menor, D-17th (Mililani, Waipi'o), a key supporter of the gas cap, softened his position as prices rose to more than $3 a gallon for regular at most O'ahu stations. Menor said he is now willing to replace the cap with a law that would require more disclosure of oil industry profits and empower the governor to bring back temporary price controls if needed.

House leaders, who want to end the price cap, said Menor's offer could break a stalemate that, if unresolved, would have left the gas cap in effect for another year.

"Given this proposal, it looks very likely that we should be able to come up with a compromise," said House Majority Leader Marcus Oshiro, D-39th (Wahiawa).

The momentum to end the price caps comes as motorists braced for the ninth rise in the gas cap in the past 10 weeks. The cap, which is adjusted each Monday based on Mainland prices, will likely rise 4 cents per gallon next week, according to House calculations. That's on top of a 14-cent increase this week.

Gas prices are the highest they have been since just after the cap was put in effect in September, and public opposition to the cap has been building as prices rise.

"When the cap was introduced, I really thought this was our savior," Ben Castillo of Wailua, Kaua'i, said in an e-mail. "Obviously, we were all wrong. I speak with truckers and other small business and we all agree: The cap needs to be reviewed."

The compromise proposal made by senators in a conference committee yesterday would repeal the current wholesale price cap, but the state would continue to calculate the cap, only using a new formula that would bring the price down by 10 to 20 cents a gallon. Gov. Linda Lingle, who opposed the current price cap law, would have discretion to reinstate the cap at the new lower price for 30 days.

DIFFERENCES REMAIN

The proposal was aimed at bridging the gap with House members who want to repeal the price cap law outright. If the House and Senate cannot resolve differences on the issue by the end of the week, the current price cap law will remain in effect. However, that seems unlikely given the Senate's willingness to compromise, said Oshiro.

"I think both parties are working hard to find something that's workable, but to make sure that customers benefit from changes in the law," Oshiro said.

The Democrat-controlled Legislature passed the cap in part to link Hawai'i's pump prices to the fluctuations found in more competitive Mainland markets. The law took effect during a period when gasoline prices across the nation have been high. Consumers who expected the cap to cut gasoline prices have expressed disappointment.

House and Senate leaders said before the session that a repeal was unlikely. But then growing opposition in the House led leaders there to shift course. Menor, who had accused some House lawmakers of political expedience, had claimed he had enough backing in the Senate to save the cap but had become increasingly isolated on the issue as gas prices went up.

Menor's compromise proposal yesterday could be a political victory for Lingle, who had repeatedly warned lawmakers that the cap was a mistake.

Lingle spokesman Russell Pang didn't return calls yesterday seeking comment on the new Senate proposal.

'GOING THE EXTRA MILE'

Previous Senate proposals called for suspending the cap, but continuing to calculate it at a lower price and bringing it back if gasoline wholesalers priced above the cap for an extended period.

"I believe that in submitting this (new) proposal, the Senate conferees are going the extra mile to break our impasse and reach a compromise with the House that is more fair and reasonable," said Menor, an architect of the existing price cap.

Rep. Hermina Morita, chairwoman of the Energy and Environmental Protection Committee, said the Senate proposal was a step in the right direction, but still contained "problems."

At least one oil industry executive opposed the Senate's new proposal.

Menor "is still insisting on his new price cap formula which is an arbitrary and unsupported computation of 'fair pricing,'" said Robert Maynard, president and chief executive for Aloha Petroleum Ltd., in an e-mail. "It is hard to imagine that he has people fooled into thinking that a nearly 20 cents per gallon reduction in the price of gasoline is something that could be swallowed by the industry."

Today is day 56 of the session. There are four days remaining.

Reach Sean Hao at shao@honoluluadvertiser.com.