Remember the times in the last five years when you pulled up to the self-service pump at a gasoline station figuring to save three to five cents a gallon for your trouble?
Remember the competition between service stations when gasoline was plentiful and one dealer tried to underprice the other?
You saved a few bucks, right?
Wrong, say oil industry and federal energy officials. You are now paying much of it back because of a loophole in government price controls.
One of the cruelest ironies of the Gas Crunch of '79 is that U.S. Department of Energy regulations allow service stations to jack up their price -- beyond price control ceilings -- to take back every penny they let you save in the old days when they were scrambling to get your business.
"by some incredible oversight," says Dan Lundberg, publisher of the authoritative oil-industry newsletter that bears his name, "no one had ever realized that in the event someday of another shortage, that someone could not only take the full ceiling price at the moment, but one could also stick the public with every penny that one had fallen short of the legal (profit) margin in the past."
The result: gasoline prices in Washington and elsewhere are going up a lot faster than crude oil increases from the Origanization of Petroleum Exporting Countries (OPEC).
The clear winners are the oil companies, their middlemen and many retail stations which are recapturing additional profits today that they passed up in an effort to lure costomers in years past.
The loser is the average motorist, who has seen:
The average price of gasoline jump by a third -- about 20 cent a gallon -- since January, adding more the $30 a month to a two-car family's gasoline bill.
Discount gasoline stations, a popular retailing idea that sprang from the 1973 shortage, hike their prices to the point where they are now charging as much or more than branded, full-service stations.
The self-service pump virtually disappear.
The fact that all the blame for the soaring price of gasoline cannot be placed on OPEC can be seen in government and private statistics, which show that crude oil costs since the first of the year have risen only 7 to 12 cents a gallon.
The difference between that and the higher prices you are now paying, represents increased profit-taking allowable under the price control regulations: a staggering $20 million to $40 million a day.
For practical purposes, says Lundberg, the profit "ceilings" established by price controls in the wake of the 1973 oil embargo have become the "floor" prices of 1979.
And despite a government projection last month that gasoline prices probably would rise by about 5 cents by the end of summer, Lundberg expects the full rise to be about 16 cents.
The evidence is now compelling that for some, The Gas Crunch of '79 has been a financial bonanza.
The behavior of gasoline prices has given rise to the popular conception that the shortage represents a conspiracy by the oil companies to withhold gasoline from the market until prices are more to big oil's liking.
In fact, as prices continue to rise, the shortage is expected to ease -- not because gasoline has been withheld from the market, but because the higher prices will force consumers to reduce their consumption.
That point, however, does not seem to have been reached yet.
Harlan Snider, a Sunoco official whose company purchased 300,000 barrels of gasoline last month at spot market prices of $1.05 to $1.11 a gallon, said: "We talk to our dealers constantly and we say, 'What would your customers prefer, volume or price?'"
The dealers reply, said Snider, who is president of Sun Oil Company's marketing subsidiary, is that, "given the choice, he'll take volume every time (at any price)."
While federal regulations seem to allow the sharp price rises that have taken place, conspiracies and price-gouging also may well be rampant and mostly undetected.
More than five years after the 1973-74 oil crisis, the energy department has yet to complete audits of major oil companies' pricing practices and the department is still trying to collect billions of dollars in documented overcharges.
New spot audits of the oil companies are due later this month. Oil company profit statements for the second quater are also due this month.
The energy department gasoline price enforcement branch, while had been dismantled as of the first of the year in anticipation of decontrol, now says that about half of the retail dealers audited in recent months have benn guilty of overcharging their customers.
And prices continue to soar.
Even senoir energy department officials acknowledge that their price-control system has acted precisely as if there were no price controls.
The controls were rooted in the good intentions of the first great shortage in 1973 when it was feared that the scramble for gas would lead to widespread price gouging.
Dealer profits were frozen at May 15, 1973 levels, or a national average of about nine cents a gallon. From then on, the regulations declared, dealers were allowed to pass along to their customers only those price increases directly related to crude oil price hikes.
Similar restrictions were placed on refiners and middlemen.
But there was a catch.
The energy department acknowledge that in highly competitive situations, oil companies and their dealers might not be able to charge the miximum prices allowed.
Thus was born the idea of "banked profits: if higher prices cannot be charged today, save them up on paper and get these "banked" profit tomorrow, when competition is not so stiff.
The big refiners, as a result, kept careful records and today, "the refiners are passing through all the banked costs that they can," said one major oil company executive.
But at the service station level, it is widely believed in government and in industry that few dealers have maintained the proper records to calculate their bank profits.
"the masses of dealers couldn't afford such sophisticated bookkeeping to determine what their banks have amounted to," said Lundberg.
A more likely explanation for how many service station owners operate comes from Lundberg's editor, Mark Emond: "a dealer may see the price across the street in 95 cents (a gallon) and he's got 88 (cents). So the dealer figures the guy across the street maybe has calculated his bank. So he raises his prices. As long as he's running with the pack, as long as he doesn't stick out, he's alright."
Not all dealers have prospered during the shortage.
Of all the new marketing strategiers that have evolved over the last five years, the key to success can be stated in a word: Volume.
The discount and self-service stations that concentrated to cut rate prices and monthly sales of up to 500,000 gallons are reaping the greatest reward today.
The energy department allocation system ensures that these bulk stations now get most of the available gasoline, and the pricing regulations now gurantee them maximum profits and then some as they collect the "banked" profits not taken in all those discount years.
Conversely, some full-service stations which did not go in for volume and -- all along -- charged maximum allowable prices may have wound up losing from the shortage.
This discount stations, says Jack W. Houston, spokesman for the National Congress of Petroleum Retailers," . . . have inflated prices and made it appear that all dealers (are getting rich), but the full-service dealers aren't."
One of the running themes of the gasoline crisis during June was the threat by retail dealers to close their stations unless maximum profit margins were raised.
"we need at least another four cents to cover the cost of inflation since 1974," argued Houston.
In the meantime, the energy department proposed to dump the current system for determining dealer profits and replace it with one of four alternatives, the most popular of which would make profits a fixed percentage of the wholesale price.
The most significant of the proposed new regulations is an end to the "banking" system. Several industry analysts -- including Lunberg -- argued that the mere discussion of proposals of eliminate this procedure was triggering panic price increases by dealers.
But even as the energy department weighs doing away with banked profits, an equal bonanza is being tallied by the major refiners, who persuaded the Energy Department on the eve of the crisis to allow more refinear of gasoline.
They pushed through the "Tilt" rule, so-called because it "tilted" more profits into gasoline production as an incentive to the refiners to invest money there instead of on other oil products.
Federal energy officials estimated in a January economic impact statement that the cost of the tilt rule to consumers would be three to four cents a gallon at the pump by the end of 1980.
The "tilt," in fact, increased prices by that much in the first three months of the year, with no indication that the refiners were using the added profits to build more gasoline refining plants.
Lundberg, who operates the most comprehensive gasoline price survey in the nation, reported last week that average premium unleaded prices had passed the $1-a-gallon mark in Chicago, Detroit and on Long Island, N.Y.
The most current survey of Washington area prices by the American Automobile Association showed that premium prices are averaging almost 96 cents a gallon, and regular 89 cents.
Prices have already reached $1 a gallon at some Washington area stations and the current rate of increase, the average price of premium is expected to reach the dreaded milestone before Labor Day. CAPTION: Picture 1, New three-digit dial for gas pump. By John McDonnell, The Washington Post; Picture 2, An old sign lies amidst a pile of discarded oil drums, showing how prices have resin since the 1973 gas shortage triggered increases. By John McDonnel -- The Washington Post