The Advertiser's May 23 article "Gas price rise here in '05 tied to cap" provided some much-needed insight to the detrimental effects the gas cap had on Hawai'i's market.

The recent Federal Trade Commission report concluded what we all knew and witnessed with the national gas prices rising following Hurricane Katrina — it was the gas cap, enacted on Sept. 1, 2005, that caused the increase at the pump following the Aug. 29 destruction caused by Katrina. As the report and the FTC's assistant director noted, Katrina did not directly affect Hawai'i's oil industry operations or traditional sources of crude oil or gasoline.

When we saw the negative implications of the gas cap peak, there was little accountability demanded of our state lawmakers. We were clearly warned of the effects of the cap by the FTC, the Stillwater report commissioned in 2003 and other experts, both local and national, about the cap driving up prices as a result of creating incentives for oil companies to set their prices at the allowable weekly maximums.

Despite these clear and straightforward predictions and analyses, supporters like the House majority leader and the Senate chair of the Consumer Protection and Housing Committee decided to ignore them. The result of those actions sent us down the path of misguided experimentation. In hindsight, the gas cap bill was drafted to be a gas floor, and oil companies reported windfall profits.

The Department of Business, Economic Development and Tourism conducted several analyses of gas price controls. "These studies all have concluded that the costs to locally regulate the price of a globally traded commodity, like gasoline or any petroleum product, far outweigh any potential benefits," wrote DBEDT Director Theodore Liu, in a February letter to Rep. Kirk Caldwell. One specific impact analysis conducted by DBEDT and published in February reveals that the gas cap cost Hawai'i's consumers as much as $54.9 million from Sept. 1, 2005, through January 2006.

As a Republican, I personally never supported any versions of the gas cap because I have great confidence in the free-market system. I question how confident the proponents of this regulatory scheme were as they kept delaying the implementation date for the gas cap to begin. Perhaps they sensed that this statewide petroleum pricing experiment would not create consumer-friendly prices.

At the very least, the majority leader and some former supporters of the cap have changed their position on transparency and monitoring of the oil industry to come into sync with Republicans and realize that these tools could be useful as we deal with our dependence on oil. Unfortunately, the Senate chair of Consumer Protection and Housing successfully stonewalled a complete repeal of the gas cap, and the people of Hawai'i and the House of Representatives are forced to live with a suspension.

There is one thing that is clear from the failed experiment — it is fool's folly to interfere with market forces on an international scale.

We are lacking the vision and courage to implement long-term, open-market solutions. Without those fundamental elements, we will continue session after session to come back and tinker with the gas cap calculation and the illusion of a competitive market.

Let's continue to work together to bring about real price relief for Hawai'i's people. We need to stop the deceit and work toward a full repeal of the gas cap.

Republican Colleen Meyer represents House District 47 (Ha'iku, Kahalu'u, La'ie). She wrote this commentary for The Advertiser.