289. Letter to researcher from Ted Gamble Clause, Deputy Attorney
     General, Department of the Attorney General, dated July 21,
     1995, at 3.

290. Letter from John Tantlinger, Ed.D., Energy Planner for the
     Department of Business, Economic Development, and Tourism,
     to Wendell K. Kimura, Director, Legislative Reference
     Bureau, dated June 13, 1995, at 2.

291. Letter to researcher from Richard C. Botti, Executive
     Director of the Hawaii Automotive & Retail Gasoline Dealers
     Association, dated July 1, 1995, at 3.

292. Letter to researcher from Alec McBarnet, Jr., Vice
     President, Hawaii Petroleum Marketers Association, dated
     July 7, 1995, at 3.

293. Letter to researcher from Jennifer A. Aquino, Administrative
     Manager, Aloha Petroleum, Ltd., September 21, 1995, at 3-4.

294. Letter to researcher from R. A. Broderick, Western Region
     Business Manager, Shell Oil Products Company, dated June 30,
     1995, at 5.

295. Letter to Wendell K. Kimura, Director, Legislative Reference
     Bureau, from Susan A. Kusunoki, Manager of State
     Governmental Activities, BHP Hawaii Inc., dated July 18,
     1995, at 3.

296. Letter from J. W. McElroy, Regional Manager, Chevron U.S.A.
     Products Co., to Wendell K. Kimura, Director, Legislative
     Reference Bureau, dated August 7, 1995, at 3-4.

297. See text accompanying note 52 in chapter 2.

298. Philip E. Sorensen, An Economic Analysis of the Distributor-
     Dealer Wholesale Gasoline Price Inversion of 1990:  The
     Effects of Different Contractual Relations (N.p., April
     1991) at vii-viii; see also United States, General
     Accounting Office, Energy Security and Policy:  Analysis of
     the Pricing of Crude Oil and Petroleum Products (Washington,
     DC:  March 1993) (hereinafter, "GAO (1993)") at 121.

299. Jeffrey L. Spears, "Note:  Arguments For and Against
     Legislative Attacks on Downstream Vertical Integration in
     the Oil Industry," 80 Ky. L.J. 1075, 1090 (Summer, 1992).

300. Sorensen (1991) at 31-35.  See also the Petroleum Marketing
     Competition Enhancement Act (S. 2041, H.R. 2966), introduced
     in the 102d U.S. Congress, which would have prohibited
     refiners from practicing in price inversion, cited in
     Hawaii, Department of the Attorney General, Gasoline Prices
     in Hawaii:  The Impact of Oil Company Divorcement on
     Consumer Prices (Honolulu:  1993) (hereinafter, "AG (1993)")
     at 26.

301. GAO (1993) at 121-124.

302. Spears (1992) at 1090; Sorensen (1991) at x.

303. For example, Sorensen (1991) concluded the following:

     .  Different levels of price volatility are observed in
        the spot market, the rack market, and the DTW market
        for gasoline in the U.S.  The greater level of price
        volatility in the rack as compared to the DTW market
        was the underlying cause of the August-September 1990
        DTW-rack price inversion.
     
     .  During the August-September 1990 period, price
        inversions were experienced in all regions of the
        country, including states where retail divorcement
        laws were in effect.
     
     .  The degree of price inversion was inversely related to
        the size class of refiners; i.e., the largest refiners
        experienced the smallest degree of price inversion.
     
     .  There is no evidence to support the claim of "price
        gouging" by refiners during the period of inversion.
        The analysis shows that major refiners effectively
        shielded dealers and jobbers from price increases
        observed in the spot market.  The total value of the
        "price protection" provided to dealers and jobbers by
        major refiners during the period of inversion was more
        than $900 million.
     
     .  Although jobber prices rose above dealer prices during
        some weeks in August-September 1990, the average
        spread between the DTW and the rack price actually
        widened in favor of jobbers over the entire post-
        invasion time period (including the period of
        inversion) through January 28, 1991.
     
     .  The analysis supports the conclusion that the DTW-rack
        price inversion of 1990 resulted from the different
        economic characteristics of the three wholesale
        gasoline markets in the U.S. and not from any strategy
        on the part of refiners to injure one group of
        wholesale buyers or to favor another.  Proposals for
        legislative remedies such as price controls, open
        supply, or retail divorcement of refiners are not
        supported by this evidence.

     Sorensen (1991) at vii.  Sorensen further noted that branded
     refiners were forced to adopt supply restrictions or other
     policies to prevent jobbers from draining their terminals
     during this period because the refiners were holding their
     rack prices significantly below the market-clearing price.
     "Despite many complaints by jobbers about these supply
     restrictions, there is evidence that some jobbers made
     considerable profits by brokering gasoline to unbranded
     customers during this period."  Id. at ix.

304. See id. at viii, x.

305. See GAO (1993) at 124.

306. Id. at 125.

307. Id.; see also Sorensen (1991) at 3-6; Spears (1992) at 1090-
     1091.

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