Gasoline prices at the pump would rise little or perhaps not at all if price controls were lifted, according to an unpublished analysis by the Energy Information Administration.
The House of Representatives, which voted last week to end gasoline price controls, is scheduled to reconsider that vote today with many observers expecting the House to reverse itself.
C. Roger Glassey, assistant administrator of the applied analysis section of EIA, told a House Intelligence subcommittee that if decontrol occurred "the price increase would not be very great if (any) at all."
Glassey, who was testifying about EIA's long-range forecasts for oil supply and demand, was asked about decontrol by several members of the subcommittee who thought they would have to vote on the issue yesterday.
Rep. Romano Mazzoli (D-Ky.), to pin down Glassey's response, asked if he meant that decontrol "would have little effect on what a customer would see pulling into a (gasoline) station."
That action (decontrol) by itself would have little effect," Glassey declared.
Glassey said the EIA analysis indicated that refiners have been able, as the result of a change in price-control regulations, to recover fully all so-called nonproduct costs associated with the production of gasoline. The change in regulations, a controversial one known as the "tilt" rule, allowed refiners to increase their selling prices by about 5 cents a gallon this year to cover increases in their non-product costs -- just about everything other than the cost of crude oil.
Since refiners are covering their costs fully with their present selling prices, the impact of decontrol hinges on whether the demand for gasoline is strong enough to allow refiners to raise their prices and increase their profits. The EIA analysis shows that "the market is clearing" -- meaning supply and demand are in balance at current prices -- another EIA offical said.
Glassey stressed that decontrol could have an effect on selling prices if oil imorts to the United States were restricted for some reason, or if there were increases in the cost of crude oil. U.S. oil imports could be restricted if world oil supplies dropped, say, as a result of another interruption in production in Iran.
Last spring during the administration's internal debate over whether to end controls of domestic crude oil prices, some officials, including then-Treasury secretary W. Michael Blumenthal, urgen decontrol of gasoline prices.
At the time, some administration economists argued that even with the shortage of gasoline that had produced long lines at stations, pump prices likely would rise only to $1.25 a gallon or so before dropping back to the neighborhood of $1 a gallon -- just about the current national average for all grades of gasoline.