APPENDIX artment of Energy shington, D.C. 20461 rable Howard M. Metzenbaum rman, Subcommittee on Antitrust, nopoly, and Business Rights ittee on the Judiciary ed States Senate ington, D.C. 20510 Mr. Chairman: July 7, 1980 I the June 18, 1980 hearing of your subcommittee on competitive5 in the pricing of gasoline (at which I appeared with retary Duncan), you asked me how much crude oil decontrol ld affect product prices over the course of this year. wered that about 6 cents of the current gasoline price is to crude oil decontrol that has already occurred and t this amount is increasing by about 0.8 cent per gallon month. With your permission, I would like to supplement record of the hearing on this point in order to provide rification of my oral comments. e estimate I gave you was the impact of crude oil decontrol the average acquisition cost of all crude oil purchased U.S. refiners. However, since an increase in average de costs also tends to raise the cost of refinery fuel, ch is the largest single component of a refiner's operational sts, further adjustments must be made to determine the 11 impact of crude oil decontrol on product prices. pending on market conditions, the total portion of gasoline ices attributable to crude oil decontrol may be 0.3 to 0.5 nt per gallon per month higher than a straight passthrough higher crude oil prices. Roughly speaking, then, the pact of crude oil decontrol may range from a little less an a penny a gallon per month to a little less than a nny and a half per month. ese estimates assume that world oil prices rise between 10 Prior to June 1979, when phased decontrol began, pout 60 percent of all crude run in U.S. refineries, including 2 foreign oil, was uncontrolled. Therefore, an increase of $1 per barrel in world prices meant an increase of 60 cents per barrel in U.S. crude oil prices, or about 1.5 cents per gallon. By early next year, about 85 percent of all crude will be uncontrolled. (Most of this percentage increase will be due to phased decontrol, although some will also be due to the natural decline in controlled oil production.) The result of a $1 per barrel world price increase at that time would be 85 cents per barrel for U.S. refiners, or about 2 cents per gallon. With total decontrol the impact of the same increase will be the full $1 per barrel, or a little less than 2.5 cents per gallon. I hope this clarifies the estimates given in the hearing. If I can be of further assistance, please let me know. COMMITTEE ON THE JUDICIARY NINETY-SIXTH CONGRESS SECOND SESSION ON S. 1717 A BILL TO AMEND TITLE III OF THE OMNIBUS CRIME CONTROL 59-967 O MARCH 5, 1980 Serial No. 96-47 Printed for the use of the Committee on the Judiciary U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1980 CONTENTS WEDNESDAY, MARCH 5, 1980 TESTIMONY Heymann, Philip B., Assistant Attorney General, Criminal Division, Department of Justice__. Page 4 Colwell, Lee, Executive Assistant Director, Federal Bureau of Investigation.. 11 Fishman, Clifford S., associate professor of law, Catholic University of 24 Prepared statement of H. Stuart Knight, Director, U.S. Secret Service. 39 44 47 49 60 Letter to Senator Biden from Philip B. Heymann, Assistant Attorney 98 100 |