Saudi Arabia boosted its oil prices $2 a barrel yesterday, sparking fears of another general round of price increases by oil exporting nations.
At $26 a barrel for its Arabian light oil, the Saudis had the lowest official selling price in the world and most analysts said the move to $28 was an attempt to reunify the fragmented pricing structure of the Organization of Petroleum Exporting Countries.
But Carter administration officials and oil industry experts are afraid other countries may raise their prices $2, too, as they did following a $6-a-barrel increase by the Saudis last December and another $2 increase in February.
The Saudi increase, retroactive to April 1, will add about $1 billion to the U.S. bill for imported oil this year. The United States gets about 1.3 million barrels daily from Saudi Arabia, about 20 percent of its imports and 7.6 percent, of total oil needs.
If no other countries follow suit, the $2 Saudi increase should mean an increase of less than half-a-cent a gallon in gasoline and other petroleum product prices -- assuming refiners can pass it on to their customers.
But stocks of crude oil and gasoline and other products are so large today, and demand for oil is down so far, that some oil prices have begun to fall. For instance, average gasoline prices across the nation fell in April for the first time since late 1977, according to the Lundberg Letter's survey of prices.
If other countries do not raise their prices, the Saudi increase will reduce the competitive advantage that four U.S. oil companies -- Exxon, Mobil, Texaco and Standard Oil Co. of Califronia -- have had in world markets because of their access to lower cost Saudi crude. The four are partners in the Arabian American Oil Co., Aramco, which takes about 7.5 million barrels of Saudi Arabia's daily output of 9.7 million.
A State Department spokesman said that while the United States has "appreciated the restraint Saudi Arabia has shown in its role as a price moderator . . . we believe that a price increase at the present time is unfortunate, given the current soft conditions in international oil markets.
"However justifiable it might be for Saudi Arabia to desire to reduce differentials in prices charged by OPEC countries for similar qualities of oil, its increase would, in no way, justify any price increase by other producing countries," the spokesman declared.
Current prices range up to the $37.21 a barrel being charged by Algeria for its very light Saharan crude, with Nigeria, Libya, Britain and Norway all above $34 for high quality oil. The lighter a crude, the more valuable it is since more gasoline and other higher priced products can be made from a barrel than can be made from heavier varieties.
But the $2 increase puts the Saudis almost exactly in line with other Persian Gulf producers -- Kuwiat, Iraq, Qatar and the United Arab Emirates. Iran has been demanding $35 a barrel for its oil, a price many buyers have refused to pay.
Both administration and industry officials said they doubted the Saudi increase had anything to do with the fact the Public Broadcasting Service on Monday night aired a film, "Death of a Princess," to which the Saudis strongly objected. The film depicted the execution of a member of the Saudi royal family and her lover for adultery.
"The increase was expected," one industry source said, as part of the Saudi's "deadly serious" effort to reestablish the pricing unity OPEC displayed until last year. The source may have obtained a "gentlemen's agreement" at a recent melting of OPEC officials in Taif, the Saudi Arabian summer capital, that other nations would not raise their prices if the Saudis did.
At the Taif meeting, OPEC officials discussed a long-term pricing strategy pushed hard by the Saudi oil minister, Sheik Ahmed Zaki Yamani. Under it, oil prices would rise not haphazardly but by quarterly adjustments indexed to the economic growth and inflation rates of industrial countries and to fluctuations in the value of the dollar relative to a group of major currencies.
OPEC ministers will meet June 9 in Algiers to consider price changes officially. The industry source said most oil executives are "not overly optimistic the Saudis can bring the others around."
The first of the higher cost Saudi oil is just beginning to reach the United States. A spokesman for Chevron said that company's first tanker cargo to which the retroactive increase applies, a 2.9-million-barrel shipment, is being unloaded at its Pascagoula, Miss., refinery. Another cargo reached Rotterdam in northern Europe on May 7, he said.
The Saudi increase means the average price of internationally traded oil is now about $30.20, up more than 130 percent since the end of 1978.
The Saudis notified the companies of the price increase by sending an official letter to Aramco. No public announcement was made.