Today's 'gasoline bargains' won't last, says DOE

If gasoline prices are coming down, why does that old Scrooge, the US Department of Energy (DOE), say they are going to climb again? Some major US oil firms are cutting the price of crude oil; there is a glut of petroleum in the world market; and, in some parts of the United States, gasoline stations are trimming prices at the pump.

Yet the DOE, in a report to Congress, predicts that gasoline, now averaging $ 1.27 throughout the nation, will cost $1.38 to $1.61 by the end of 1980.

By December 1981, the retail price of regular leaded gas will be even higher -- $1.50 to $1.99, according to the DOE.

Are government analysts so buried in their figures that they do not know what is going on in the real world? Or are they right?

"Decontrol," says Deputy Energy Secretary John C. Sawhill, "will add 10 cents a gallon to gasoline and home eating oil this year, and nearly as much in 1981."

President Carter failed to get Congress to slap a retail tax on gasoline. But Congress did not block another price-hiking measure -- the progressive lifting of price controls from domestic US oil.

Until January of this year, about 70 percent of all oil pumped from US wells was priced, by law, below the full market price set by the 13-member Organization of Petroleum Exporting Countries (OPEC).

Such controls, resulting in cheap gasoline, had at least two bad effects, many experts believe:

* They encouraged Americans to buy big cars and gave Detroit little incentive to match the Japanese with fuel-efficient models.

"Had the government not sent the wrong signal to Americans," says Reubin Askew, chief White House trade negotiator, "a market [for small cars] might have been created."

When OPEC raised oil prices more than 100 percent last year, US carmakers were caught off base and nearly 2 million Americans switched to small Japanese imports.

* Meanwhile, unaware of the real cost of oil because they were shielded from it, Americans bought more and more petroleum from overseas.

So Mr. Carter decreed a step-by-step abolition of price controls, designed to bring US oil to the world market level by Oct. 1, 1981.

That is why gasoline, home heating oil, and other petroleum products will cost more, not less, as the months roll on.

Indeed, Energy Secretary Charles W. Duncan Jr. tells Congress that, because of decontrol, Americans will pay $47.4 billion more for oil between June 1979 and Oct. 1, 1981, than they would have paid if controls had remained in place.

This is up from an original government estimate of $16 billion in added costs. The increase, Mr. Duncan says, derives from OPEC's more than doubling of oil prices last year and this.

The price of US oil, in other words, has to climb higher to match OPEC's market price, than had been anticipated when decontrol began.

To make sure that American oil companies do not scoop up all these extra profits, Mr. Carter and Congress together fashioned the windfall profits tax, which will siphon billion of dollars from the oil firms into the US Treasury.

To date, brimming storage tanks and the fact that Americans are using a lot less oil than they did last year combine to put some downward pressure on US oil prices.

That pleasant situation, in the judgment of most experts, is short-lived. Sooner or later -- especially when the US economy begins to grow again and demand more oil -- prices will resume their long upward creep.

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