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Sky High Gas Prices? Compared To What?

In the front-page article "Gasoline Prices Take 'Scenic Route' Downhill," July 8, the author confuses cause and effect by attributing higher gasoline prices in the United States to low inventories. Sustained, higher world crude-oil prices - not low inventories - were the main reason for the rise in gasoline prices earlier this year

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Increased demand and less-than-anticipated production of crude oil throughout the world starting late last year led to drawdowns of inventories at a time of year when these stocks normally increase. These drawdowns served to keep gasoline prices stable early in the year.

However, inventories cannot be drawn down indefinitely, and when refiners had to replenish their stocks they dipped into a world crude-oil market in which tight supplies and high demand had resulted in sharply higher prices. The higher prices paid for crude oil led to higher prices for gasoline.

The author also asserts that American gasoline prices have gone "sky high." Compared to what? European prices that are three or four times higher? Even if inflation is not taken into account, the current average pump price of US gasoline - $1.27 a gallon - is still 8 cents cheaper than it was in 1981. There are very few products that are cheaper today than they were 15 years ago. And if inflation is factored in, gasoline prices are near historic lows.

Arthur E.F. Wiese, Jr.


Vice President

American Petroleum Institute

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Finding alternative energy sources

As the author makes clear in the front-page article "Mideast Oil: At What Price?", July 11, the time is ripe for a serious debate over US energy policy. The administration believes that new energy and transportation technologies can reduce our dependence on Mideast oil, reduce the trade deficit, improve the environment, and create jobs. Congress, however, has been deeply cutting the Department of Energy's research and development investments that are aimed at reducing that dependence.

The article notes that "Due to major research breakthroughs, renewable, nonpolluting technologies once dismissed as too expensive and inefficient, such as solar and wind generators," are becoming competitive. Much of this is due to more than a decade of Department of Energy research. Yet the House Interior Appropriations Committee recently zeroed out all funding for wind energy. Ironically, foreign competitors aren't making the same mistake.

Absent such investments, the US trade deficit in oil is projected to double to $100 billion a year by 2010, and the world's dependence on Persian Gulf oil may surpass its highest level to date, 67 percent, attained in 1974. As the saying goes, if we do not change our direction, we are likely to end up where we are headed.

Christine Ervin


Assistant Secretary, Office of Energy Efficiency and Renewable Energy

Department of Energy

Portugal and East Timor

I am very grateful for your kindness in publishing my letter "Portugal's Role in East Timor," July 16.

However, I must also register my disappointment that in exercising your rights of editing, one sentence [about Portuguese rule in East Timor] was rendered confusing. It should have read: "How can a colonial country, having for four centuries oppressed its will against the wishes of the local population, then abandoning that territory on the brink of civil war, call itself an administering power?"

D. Budiman


Minister/Deputy Chief of Mission

Embassy of the Republic of Indonesia

Your letters are welcome. For publication they must be signed and include your address and telephone number. Only a selection can be published in the Monitor and the Monitor's on-line edition and none acknowledged. All letters are subject to editing. Letters should be addressed to "Readers Write" and may be sent by mail to One Norway St., Boston, MA 02115, by fax to 617-450-2317, or by Internet e-mail (200 words maximum) to OPED@CSPS.COM.

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