Hawaii Sues Gas Cos. Over Prices
Oct. 02, 1998
HONOLULU (AP) _ Tired of paying the highest gas prices in the nation, the state on Thursday sued 13 petroleum companies in federal court for allegedly fixing prices and overcharging Hawaii drivers by $73 million a year.
The lawsuit names divisions of the BHP, Chevron, Shell, Tesoro, Texaco and Unocal oil companies as defendants. All do business in Hawaii, where prices at the pump have exceeded $1.60 a gallon while mainland prices dropped below $1 this summer.
The lawsuit alleges that for the past decade, Hawaii's gasoline wholesalers and two refiners fixed gasoline prices at an artificially high level and agreed to allocate market shares among themselves in violation of federal and state antitrust laws.
The state also accuses the companies of price gouging and discrimination in pricing, both of which would violate state law.
Hawaii seeks more than $150 million in compensatory damages, treble damages and civil penalties of more than $70 million. The potential total is more than $500 million.
``Hawaii's retail gasoline prices are the highest in the nation,'' Gov. Ben Cayetano said Thursday. ``In the wake of dramatically falling crude oil prices by as much as 40 percent, Hawaii consumers should be seeing lower prices at the pump.''
He said Hawaii drivers have been paying an average of at least 20 cents more for a gallon of gas than drivers on the mainland. That difference hit 50 cents this summer when mainland gas prices plunged to their lowest levels ever after inflation was factored in, but Hawaii's pumps typically charged $1.50-$1.60 a gallon.
Cayetano said Hawaii oil companies earn an extra $200,000 a day based on current wholesale prices. That equals $73 million a year in extra costs for Hawaii drivers, or extra profits for the oil companies, he said.
The lawsuit names Chevron Corp., Chevron USA Inc., BHP Petroleum Americas Refining Inc., BHP Hawaii Inc., Shell Oil Co., Shell Oil Products Co., Texaco Inc., Texaco Refining and Marketing Inc., Tesoro Petroleum Corp., Tesoro Hawaii Corp., Tosco Corp., Union Oil Co. of California and Unocal Corp.
Chevron's Hawaii pricing manager, Mike Neeley, denied any collusion and said the local pump prices were competitive for the marketplace. Chevron has the largest market share in Hawaii.
``We don't feel we're making any excessive profits in Hawaii,'' Neeley said. ``We're setting our price relative to our competition.''
When asked if Hawaii's prices were higher than the mainland because of the cost of doing business here, Neeley said, ``There are different competitive factors in every market.''
An official at Texaco Refining in Honolulu said he had not seen the lawsuit and would not comment on its allegations.
The state hired a San Francisco firm _ Hosie, Wes, Sacks & Brelsford _ to file the lawsuit after soliciting inquiries in newspaper ads, including in The Wall Street Journal.
The firm will be paid on a contingency basis.
The issue of high gas prices is not a new one for the state. A deputy attorney general has been studying the issue since 1989.
In 1997, the Legislature created the Petroleum Advisory Council to investigate the situation and report back to lawmakers before the start of next year's session.