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Survivalist Pro
Photo: Rachel Claire
President Reagan President Reagan today abolished the remaining price and allocation controls on domestic oil and gasoline production and distribution, carrying out a pledge to end what the Administration regards as counterproductive Federal regulations of the oil industry.
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Read More »The Energy Department expects the accelerated decontrol to reduce consumption by the equivalent of 50,000 to 100,000 barrels a day in coming months. Reduced consumption usually translates into a reduction in oil imports, which Secretary Edwards said cost $60 billion last year. Industry officials and others note that drilling activity has already increased to record rates in recent months and that because of equipment shortages little further gains can be expected in coming months. Over the longer term, however, the incentive of free-market prices is expected to at least prevent domestic production from falling, as it did through most of the 1970's. The price of domestic crude oil will rise about $4 a barrel, to world levels of $37 to $38 a barrel. Some estimates put the additional cost to consumers at $10 billion between now and Sept. 30, with $7 billion going to the Treasury, $2 billion to the industry and $1 billion to state and local governments. A portion of the additional Government revenue will pay for oil being pumped into the strategic petroleum reserve. Republicans hailed the President's order, and opposition from Democrats was generally subdued. House Speaker Thomas P. O'Neill Jr., Democrat of Massachusetts, said that while he thought the move reflected ''poor timing'' by the President, his political ''honeymoon is still on.'' And when asked whether there was any possibility that Congress would seek to reimpose controls, as suggested by Senator Howard M. Metzenbaum, Democrat of Ohio, Mr. O'Neill said the mood of members was against the idea. Some minor elements of Federal controls will remain in force until March 31. Under these exemptions, made for the sake of an ''orderly'' transition, state governments will be allowed for two more months to allocate small amounts of heating oil, and some refiners benefiting from assured access to crude oil supplies will continue to do so. Oil Import Subsidy But the bulk of both the entitlements program and the allocation controls were ended today. The entitlements plan forced refineries using price-controlled domestic crude oil to pay subsidies to those using imported oil. One result was that domestic refiners in the aggregate paid less than world prices for their crude, a situation the Administration called a clear-cut oil import subsidy in direct opposition to stated objectives of energy policy to reduce imports.
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