Energy Official Sees No Gas Price Gouging With AM-Gulf-Crisis Economies, Bjt Graphic
Nov. 13, 1990
CHICAGO (AP) _ The U.S. Energy Department has found no evidence of fuel price gouging by American oil companies in the wake of Iraq's invasion of Kuwait, the agency's No. 2 man told oil executives Tuesday.
''If anything, there has been a lack of profits that should have been made and prices that should have been charged for gasoline,'' Deputy Energy Secretary W. Henson Moore said in a speech to the annual meeting of the American Petroleum Institute.
A consumer group conceded that oil companies have used restraint in raising gas prices, which have not increased as sharply as crude oil, heating oil and jet fuel prices since the early August invasion.
But the restraint was not applied fairly and the companies still made healthy profits, said Christopher Dyson, research director for Buyers Up, an energy consumers group in Washington founded by Ralph Nader.
''We shouldn't be patting the oil companies on the back,'' Dyson said in a telephone interview.
Moore, speaking on the final day of the three-day API meeting in Chicago, said price increases of 60 percent for crude oil, 50 percent for heating oil and nearly 80 percent for jet fuel since late July reflect supply-and-demand realities plus a ''war premium'' that factors in the threat of a Middle East war.
Moore said, though, that increased crude production by Saudi Arabia and domestic oil companies has more than made up for the loss of 4.3 million barrels daily caused by the U.S.-led embargo of shipments out of Iraq and occupied Kuwait.
Wholesale gasoline prices have risen nearly 30 percent since late July, from about 65 cents to about 84 cents a gallon. Retail prices have risen 31 cents a gallon since the invasion, to $1.385 per gallon for self-serve unleaded gas, according to a weekly survey released Tuesday by the American Automobile Association.
''At this point, the information we have does not show any price gouging whatsoever,'' Moore said.
He said that if the government fails to present the facts about oil prices to the public, ''they're subject to listening to misinformation and accusations and believe them true.''
Dyson said oil companies held down gasoline price increases out of fear that Congress would otherwise pass restrictive legislation.
But he said while the companies strongly restrained the price of gasoline they sold to their own dealers, they did not rein in prices as sharply on the gasoline they sold to independent distributors, making it tougher for the independents to compete in the retail market.
''In my book, that's discriminatory pricing,'' Dyson said.
He also said that while major U.S. oil companies did not charge as much for gasoline as they could have, they still managed third-quarter profit increases averaging 22 percent because they were able to sell crude oil at sharply increased prices while their production costs remained the same.