Looking a little like Br'er Rabbit in his battle with the tar baby, the Energy Department yesterday ordered Ohio's largest gasoline retailer to boost its pump prices by 10 cents a gallon.
The price increase, imposed on Standard Oil Co. (Ohio), was meant to bring Sohio's prices in line with other Ohio gasoline marketers, particularly a group of independent dealers who protested that their inability to compete with Sohio's low prices was driving them out of business.
Sohio, had been selling regular gasoline for as low as $1.01 a gallon recently, thanks to a subsidy it receives on Alaskan crude oil shipments to its gasoline refineries. The subsidy is created under the Energy Department's entitlements program, which is meant to equalize the costs United States refiners pay for crude oil.
But the effort to undo the effects of the subsidy in Ohio by Marvin Goldstein, head of the Energy Department's Office of Hearings and Appeals, plunged the department into new controversy yesterday.
Rep. Lyle Williams (R-Ohio) called for a congressional investigation.
Goldstein's order could force Sohio to add the 10-cents surcharge to its pump prices for three months while the Energy Department tries to untangle the regulatory conflicts.
In the short run, the order amounts to a $14 million federal tax on Sohio's gasoline over May, June and July because Goldstein directed that proceeds from the added gasoline charge be paid to the Treasury.
He left open the possibility of a revision in regulations that would include the $14 million in the pool of funds that oil companies pay each other to equalize refiners' crude oil costs.
Jack Blum, representing independent gasoline marketers, had complained that Sohio, Exxon Corp. and Arco -- the principal importers of Alaskan crude oil -- had a price break of between $4 and $7 a barrel thanks to the entitlements program.
The concession had been granted initially to permit the companies with Alaskan oil to compete with domestic oil companies that didn't face the high costs of transporting the Alaskan crude to the lower 48 states.
But the steady escalation in oil prices worldwide and in the United States has permitted the Alaskan oil producers to compete readily with domestic refiners.
Sohio, in statement yesterday, said it will take the Energy Department to court.