OPEC has met, and the price of oil will now rise again-by quite a lot, In an instructive coincidence, the White House has simultaneously postponed, once again, President Carter's speech on energy and the economy. For weeks that speech has been dancing along the calendar like a will-o'-the-wisp, always just out of reach. Apparently the administration's indecision over oil-price controls, and the inflationary effects of lifting them, remains unresolved. There is a relationship betwee think of any effective response.
This time OPEC price increases take a peculiar form that makes the American reply more important that ever. There is always internal tension within OPEC. Saudi Arabia keeps its vast weight on the side of moderation. At the other extreme, the radical North African states, with their more limited frsources, press hungrily for the highest possible price of a standard type of Saudi oil, with differentials for other grades of oil and other locations.
The Saudis said yesterday that they will raise their price significantly on April 1. That was inevitable. But, in addition, OPEC has given its members its permission to start charging national differentials and premiums at whatever amounts they choose. The North Africans in particular think that the market will bear a huge increase.
Are they right? The answer depends mainly on Americans-the government, industry and consumers together. North Africa produces crude oil of high quality and low sulfur content. A lot of it comes to the United States. It is well adapted for gasoline and for the low-sulfur fuel oil that most American cities now require. Gasoline consumption usually beings to soar in this country in late spring, with the advent of the vacation season. The North Africans are counting on their American customers to keep dongin what they have done after every price rise over the past six years-to complain, but to keep buying regardless of cost, and to keep subsidizing those costly oil imports by holding domestic prices down with legal controls.
It's not helpful to rail at OPEC. American oil imports all winter have been substantially higher than the year before. As long as Americans keep buying more and more of their oil, it is hard for poor and underdeveloped nations in North Africa to see why they shouldn't charge more for it. Mr.Carter worries a lot about the inflationary effects of lifting oil-price controls and imposing higher gasoline taxes. Perhaps he ought to worry a bit more about the inflationary effects of a price-control system that encourages steadily increasing oil imports.