Back in August, I told you that Hawaii was attempting to cap the price of gasoline, but that they were making a very bad mistake by capping the wholesale price. Instead of reducing the price at the pump, this would raise it, for reasons I explained in the article.
I was a little nervous about writing that because I’m strictly an amateur at economics: I just read a lot of popular books on the subject. Nevertheless, everything I knew told me that I was right and the Hawaiian legislature was wrong, so I went ahead and posted the article and waited for the verdict of history.
That verdict is now in. I was right and the Hawaiian legislature was wrong.
One study by an economics professor showed the gas cap cost consumers 5 cents more per gallon.
An analysis by the state Department of Business, Economic Development and Tourism estimated that island motorists paid $54.9 million more than they otherwise would have in the first five months under the cap.
Hawaii has suspended its gas cap.