Three of the nation's largest oil companies announced yesterday that they will cut gasoline allocations to dealers next month even as word was being passed within industry and government circles that the national gasoline crunch may be easing.
This paradoxical turn of events came as Texaco, Gulf and Continental publicly said that they will slash allocations 5 to 10 percentage points below May levels. At the same time, one of the Department of Energy's top oil regulatory officials, Douglas Robinson, said "there is some reason for optimism. The situation will not get sharply better but will improve."
Robinson's view was shared by the chief economist of Standard Oil of Indiana, Ted Eck, who said, "The situation has pretty much bottomed out." He said his company plans to hold its June allocation at May's level.
Mark Edmond, editor of the Lundberg Letter, an oil trade Journal, agreed that the situation had bottomed out, but added, "There is no hope for significant improvement."
Edmond predicted that actual deliveries of gasoline to dealers would be a few percentage points above May deliveries. But because consumption generally increases in June, supplies will be tight in some parts of the country.
DOE officials also said there may be slightly less gasoline available in June than there was a year ago.
The guarded optimism about supplies was tempered by discouraging news on prices. Oil industry and some DOE experts now privately estimate that a gallon of gasoline may cost on etra 10 cents or more by the end of the year. Gas prices already have risen nearly 15 cents a gallon since January.
President Carter's oil price decontrol program, which begins Friday, will account for some of the increased price at the pump, but most of the price hike will result from increases expected to be imposed by the Organization of Petroleum Exporting Countries.
As an illustration of the continued sharp upward movement in world prices, Continental Oil Co. Vice President E. E. Schafer yesterday said that Libya notified Conoco it was raising its oil prices to $21.09 a barrel. "This is the highest price I know of," Schafer said.
Texaco announced yesterday that it would cut June allocations to 70 percent from May's level of 80 percent. Gulf Oil Corp. said it would cut its allocations from 90 percent to 80 percent. And Samuel Schwartz, vice president of Continental OilCo., said his company would cut its allocations from 80 percent, "probably" to 7 0 percent. Under DOE allocation rules, dealers receive a percentage of their actual deliveries during the so-called "base period." The base period is October 1978 through February 1979.
Except for Standard Oil Co. of California, which says it will increase its dealer allocations by 5 percentage points during June, major oil companies who have announced their latest monthly allocation figures say they will stay at May levels.
Shell Oil Co., the nation's largest gasoline retailer, and Exxon, the world's largest oil company, have yet to announce their June allocations, although industry sources predict they will hold at their May levels.
DOE officials stressed that allocation percentages are always set lower than actual deliveries.
Two factors account for the slightly improved outlook in supplies. Oil imports have risen by about 400,000 barrels a day since last month, and refiners are producing more unleaded gasoline than they were just a few weeks ago.
On the pricing front, Edmond said there is some evidence of a widespread paractice among gasoline dealers to charge more for gasoline than is allowed under DOE pricing regulations. As an illustration, he said that during the week of May 18, 78 percent of the nation's retailers were charging prices above the national ceiling for regular unleaded gasoline at full-service pumps.
Jack Blum, an attorney for the Independent Gasoline Marketers Association, took issue with the suggestion that there was widespread overcharging at retail stations. Blum says that nationwide statistics do not reflect the profit margins individual dealers are allowed under DOE regulations.