Sen. Henry M. Jackson (D-Wash.) gave the Carter administration a piece of bad news yesterday by predicting the Senate would veto President Carter's expected proposal to end controls on gasoline prices.
"There will be gasoline decontrol in time, but the time is not now," Jackson said in an interview following morning hearings before the Senate Energy Committee, which the chairs. Jackson, who until yesterday had not expressed an opinion on deregulating gasoline prices, said lifting price controls on galoline would result in unwarranted increases in inflation.
"The timing would be bad... This is a substantial part of the consumer price index, and the psychological impact would be adverse," Jackson said, while stopping short of endorsing a Senate veto of deregulation.
The Energy Department, in a study released last month, says that the removal of controls would raise gasoline prices at the pump by as much as 4 cents a gallon. In addition, DOE and other senior administration officials have been saying privately that they expect the Organization of Petroleum Exporting Countries to raise oil prices at their meeting this week. The OPEC increase, the officials said, could add another 2 cents to the price of a galion of gasoline.
Two other senators, Howard Metzenbaum (D-Ohio) and John durkin (D.N.H.), yesterday called for vetoing the gasoline decontrol proposal.
Under a 1975 law, either the House or Senate can veto the proposal.
Deputy Energy Secretary John F. O'Leary indicated yesterday that the administration was going to press on for decontrolling gasoline prices. "It is too early to make a head count on a veto," O'Leary said, adding, "When our proposal goes up, the Senate and House members can concentrate on it."
O'Leary's assessment was echoed by Jock Blum, a representative of the Independent Gasoline Marketers Council, who said, "I think Jackson's assessment is wrong, we haven't gotten to the count of new members."
Jackson's prediction, however, came as a surprise to some oilmen who had expected more problems for the decontrol proposal from the House than from the Senate. So far there has been no organized opposition in the House, but Rep. John D. Dingell (D-Mich.) has called for hearings on gasoline next week before his subcommittee on energy and power. Dingell, so far, has not expressed public opposition to decontrolling gasoline prices.
In testimony before the Senate Energy Committee yesterday, O'Leary said the nation's overall gasoline supplies "appear to be adequate," but added that supplies of gasoline "might be tight by next summer" if demand for gasoline continues to run high.
O'Leary said that the shortages of unleaded gasoline facing some companies such as Shell Oil Co., "appear to be unique." Shell, the nation's largest gasoline marketer, has been allocating -- in effect rationing -- gasoline to its dealers for the last two weeks with DOE approval.
At the hearing Shell vice predident J. H. Denike denied that the company was holding back gasoline supplies from its dealers to win congressional approval for the deregulation measure at DOE.
"We are not holding back supplies to increase prices," Denike said, adding that the projected shortages resulted from the effects of regulations issued by the Energy Department and Environmental Protection Agency, and energy mileage efficiency requirements.