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Ralph Nader > In the Public Interest > It’s A Gas — One Dollar A Gallon?

During the last month, sources within the oil industry began floating the prospect that gasoline could sell at a dollar a gallon within five years!
The oil industry always thinks big whether in seeking tax loopholes, government insulation from competition or political campaign contributions. But in these days of calculated gasoline shortages, the industry’s “major”(about 20 large oil companies) may be taking their greatest gamble.
In cutting off or drastically reducing gasoline supplies to the independent, non-brand gas stations, the “majors” are moving toward their long desired goal of driving these stations out of business. These independents have been a major factor in keeping the lid on gasoline prices to motorists. Without their price competition, the “majors” will be able, once the loose controls are lifted or raised, to increase their prices toward that one dollar a gallon figure.
However, a backlash is building which may result in state and federal investigations of a more pervasive character than anything experienced by the oil industry. It is one thing to buy up politicians and get laws which jack up prices and profits. It is quite another thing to flirt with curtailing gasoline supplies. When the pumps start running dry, other, responsible politicians find they’ve got a triple constituency of undermined gas retailers, discomforted consumers, and local government fuel purchasers.
Consider these recent developments:
– Connecticut Attorney General Robert K.Killian has subpoened thirty-one gasoline distributors for five major oil companies concerning their involvement in any efforts by these “majors” to ration gasoline supplies in the state. Killian also sent a telegram to U.S. Attorney General Richard Kleindienst to impanel a grand jury toinvestigate a possible conspiracy to limit gasoline sales to certain retailers. Killian told Kleindienst that the rationing system rested on “a purported national gasoline shortage which may well have been deliberately created to drive independent dealers out of business and drastically increase the wholesale and retail price of gasoline.”
– The general manager of the District of Columbia mass transit system, Jackson Graham, charged earlier this month that “collusive practices” by major oil companies are indicated by the failure of 12 “majors” to respond to bid invitations to supply fuel for the city’s fleet of 1,764 buses. The two other companies invited to bid submitted totally unacceptable offers, according to Graham, who asserted: “You can’t have no responsive bids out of 14 requests without some talking going on.” “It isn’t a matter of supply and demand. It’s politics, political blackmail.” The Metro Board voted to ask the Justice Department to investigate the oil companies after hearing their director of operations, Ralph Wood, state that “Almost every transit property in the East is experiencing this kind of thing.”
– Federal Trade Commission Chairman, Lewis A. Engman, told a House Appropriations Subcommittee that the FTC’s largest investigation into the structure and conduct of the major oil companies was being received with resistance and court action to block subpoenas for information.
– Four Congressional Committees are holding or planning hearings on the oil cartel and its impact on the nation’s consumers and energy policies. Such hearings may help coalesce the efforts of mass transit authorities, state attorneys general, and independent retailers to get to the bottom of these oil company machinations.
There are many questions which have been begging for answers. For example, why are refineries not working at full capacity? Why do the individual companies resist disclosing their gas reserves and the number of capped wells? Why do the oil companies assert that overseas producers are “at maximum levels” when Iran and Iraq have been complaining about company underproduction–a factor which led Iraq to nationalize that consortium? Have independent refiners, such as in California, been pressured by the “majors” to sell theirgasoline to the majors’ brand dealers, instead of to independent dealers, or lose their source of crude oil from pipelines controlled by those same “majors?”
There are many other questions–relating to control of oil prices and other forms of energy monopolization–which government subpoenas and private litigation may be putting to these oil conpanies. The answers could not come too soon for burdened consumers and taxpayers.