The price cap for wholesale regular gasoline on O'ahu could drop about 8 cents a gallon next week, ending two weeks of steep increases.

State officials tomorrow will announce the new wholesale gasoline price cap to take effect Monday. Preliminary Advertiser calculations point to a decline in the cap to $2 a gallon from $2.08 a gallon for regular on O'ahu.

The wholesale cap doesn't include taxes and dealer markup. According to the AAA Daily Fuel Gauge Report the average price for regular reported yesterday on O'ahu was $2.712 a gallon.

The cap sets an upward limit on what wholesalers can charge for gasoline. Wholesalers are free to price below the cap, but most have opted to set their prices near the cap to offset times when the law forces them to lower their prices, industry analysts say. Retailers have no limit on what they can charge at the pump.

During the past two weeks, the maximum wholesale price of gasoline has risen about 25 cents a gallon for regular on O'ahu.

Since the cap took effect on Sept. 1, local prices have tracked more closely with Mainland prices. At the same time, Hawai'i gasoline prices have been increasingly volatile.

The cap, set by the Public Utilities Commission, is based on the five-day averages of wholesale regular unleaded gas for the three spot markets — New York Harbor, Gulf Coast, and Los Angeles.