It's impossible to read a paper or watch a news broadcast right now without hearing about soaring prices at the nation's gas pumps. Prices that were already on the rise skyrocketed last week after Hurricane Katrina disrupted much of the country's oil supply chain.
But Hawaii is trying a unique experiment: Last week the state became the first to institute a cap on gasoline prices. Hawaiians frequently pay among the nation's highest gas prices, and the cap--approved last year--was intended to bring wholesale gas prices in line with those in the mainland U.S.
Unfortunately, the cap couldn't have come at a worse time. As Hawaii pegs its gas prices to record highs across the nation, its first adjustment on Monday was expected to increase the per gallon cost by 27 cents. In time, though, when gas distribution returns to normal and prices settle down, it will be interesting to watch Hawaii to see if its cap has the intended effect of lowering the price Hawaiians pay at the pump.