Gasoline prices seem to be disproving the adage that what goes up must come down.
Although crude oil prices have dropped more than $6 in recent days, most major oil companies said yesterday they had not significantly reduced their wholesale gasoline prices, and some have even raised prices slightly this week.
Several smaller oil companies, however, said they had cut prices considerably in the past couple of days, including Baltimore's Crown Central Petroleum Corp., which sliced some wholesale prices by more than 16 cents a gallon.
Most of the gas-price cuts in recent days have come from the companies that had the largest increases at the pumps since oil prices began skyrocketing after Iraq invaded Kuwait Aug. 2, oil industry executives and analysts said.
But officials of major oil companies said their prices are not coming down because they said they did not raise them enough in the first place to cover the entire increase in the cost of crude oil. Texaco Inc., for instance, said its gasoline price has gone up 27 percent since Aug. 1, while crude prices, at their peak, were up 40 percent.
The price of a benchmark barrel of crude oil, which peaked at $32.35 last week, fell another $1.96 on the New York Mercantile Exchange yesterday to close at $25.92. Gasoline prices also continued to plummet on the exchange, falling 3.81 cents to 84.72 cents a gallon, down from a peak of $1.11 last week.
"I expect to see that at the pump tomorrow, and if we don't, we're going to start complaining," said Ed Rothschild, director of Citizen Action, a consumer-advocacy group that has long been critical of the oil industry's pricing practices. "They came up very fast. ... Since they're coming down, we should see the same response."
For the most part, however, prices at the corner filling station have not followed the downward slide seen on the commodities market. The American Automobile Association said yesterday that its national survey of gas prices showed a 3.3-cent average increase since Friday, to $1.31 a gallon.
Several oil industry officials argued yesterday that their gasoline prices, at worst, are up no more than the overall increase in crude oil prices since Aug. 1, and in many cases continue to lag the rise in crude prices.
"We're not planning on reducing our prices until we can recover a little bit more of our costs," said Carole Edwards, a spokeswoman at Mobil Corp.'s Fairfax headquarters. The company, which has raised its gasoline prices 12.4 cents a gallon since Aug. 1, has not changed the price for several days, she said.
John Lichtblau, executive director of the Petroleum Industry Research Foundation, a think tank partly funded by the oil industry, said gasoline prices "never went up nearly as far as crude prices did. They went up something like 12 or 13 cents, which is a lot less than the $14 increase you had as of last week in crude prices."
That $14 oil-price increase is equal to about 33 cents a gallon of gasoline.
Among the major oil companies this week, Exxon Corp. said its wholesale price had gone up about eight-tenths of a cent a gallon, Amoco Corp. and Chevron Corp. have raised prices slightly in some markets and reduced them a bit in others, and Texaco cut its prices as much as 4 cents in some markets. Atlantic Richfield Co., which last week ended a much-publicized price freeze that left it far below the industry average, has raised prices about 2 1/2 cents a gallon this week.
Many smaller companies said yesterday they were cutting their prices, and some attributed the cuts directly to the decline in crude oil prices. "The crude prices went down $4 a barrel Monday, went up $1 a barrel yesterday, and I understand they're down again today," said Bill Ryder, a spokesman for Marathon Oil Co., which cut prices as much as 5 cents a gallon as a result.
Most of the smaller oil companies do not have the vast crude oil reserves of their larger competitors, and thus have not enjoyed a run-up in the value of their crude oil that would allow them to hold gasoline price increases down. As a result, these companies are more susceptible to swings in crude oil prices.
Amoco..........Up or down slightly*
2 1/2 cents*
Chevron........Up or down 1 cent*
2 to 10.7 cents
1 to 16.5 cents
1 to 5 cents
1 to 4 cents
*Changes vary in different markets
SOURCE: The companies