The last great gasoline bargain in America disappeared abruptly yesterday as Sohio, with prices as low as $1.08 a gallon at 25 BP and Scot stations in the Washington area, announced an 11-cent-per-gallon increase.
The sudden price increase, triggered by an imminent change in federal crude oil regulations, caused rage and disappointment here yesterday among motorists, who have gone out of their way for months to patronize the low-priced stations.
"I think it's disgusting," said Jo Ellen Whitehead, a student who was pumping gasoline into her Mercury Bobcat in a Springfield Scot station where regular jumped from $1.09 to $1.20 and unleaded from $1.13 to $1.24 yesterday.
Those new prices just about matched the Washington area average for self-service gasoline of $1.19 for regular, and $1.25 for unleaded as of last Friday, according to a Washington Post Survey.
Sohio's unusually low prices during the last year resulted partly from a malfunctioning of the federal program designed to keep gasoline prices at the pump roughly equal among all companies.
Under the program, companies with access to cheap, price-controlled domestic crude oil must make monthly payments to other refiners that must depend mainly on more expensive foreign sources for their crude oil. The payments are intended to equalize the costs.
Alaskan oil has been treated like expensive foreign oil by federal officials who wanted to subsidize it to get it flowing fast. Because of this, and because Sohio's crude supplies are 75 percent Alaskan, the company was receiving a big subsidy and passing it on to its customers in the form of lower prices.
The company was required to pass the subsidy on to customers under federal gasoline price rules.
The subsidy became enormous as world crude prices began skyrocketing in early 1979 after the Iranian revolution caused a worldwide oil shortage.
Oil companies whose customers were not benefitting from the subsidy put pressure on the federal energy department to eliminate it, but it has taken federal officials until now to make the change.
Under a new rule expected to go into effect next week, the subsidy will be eliminated, and Sohio customers no longer will pay unusually low prices.
It also means that motorists who buy gasoline from most other oil companies -- the companies paying the monthly subsidy to Sohio -- no longer will have to pick up that price difference in their pump prices.
The savings the companies make will be passed along to their customers, but these savings will be so spread out among so many companies that any price cut by an individual company would be scarcely noticeable.
"The overall average national price of gasoline will not be affected by this," an energy department spokesman said. He said he didn't understand why Sohio put the increase into effect before the new rule went into effect.
A Sohio spokesman said the company moved quickly because it fears the rule change will be retroactive. If the rule for some reason doesn't go prices again, the spokesman said.
The Sohio price increase comes at a time when gasoline supplies here and nationally are plentiful and when Washington area gasoline prices have not risen substantially for about three months.
The increase has its strongest impact in Ohio and other parts of the Midwest where Sohio (Standard Oil Co. of Ohio) has 2,500 stations.
But Sohio's BP and Scot stations here attracted strong interest among motorists even though they command only a tiny part of the Washington gasoline market.
"I come here every week, I make it a point to come only here," said Samuel Luke, who shook his head in disbelief as he looked at the new $1.19 a gallon price for regular yesterday at a northwest Washington BP station.
The prices at Tom Rosaki's BP station in Oxon Hill were slightly higher yesterday than the area averages. Rosaki said he was trying to maintain his 16-cent per gallon dealer profit margin, but noted that this put his price slightly above other stations that he knew of.
"It's going to hurt," Rosaki said.