$1.50 gas is in the offing, OPEC or no
Americans can expect to pay nearly $1.50 a gallon for gasoline by the end of 1980, even if OPEC does not raise oil prices again this year. This conclusion stems from talks with top Carter administration officials, who analyze the situation this way:
Price hikes already put into effect by OPEC (the 13-member Organization of Petroleum Exporting Countries) will add perhaps 15 cents of gallon to the retail price of gasoline and home heating oil.
Another dime a gallon will be tacked on by President carter's decontrol program, scheduled to bring the price of domestic oil to the world level by Oct. 1, 1981.
This combination will add about 25 cents a gallon to gasoline prices, now in the $1.15 to $1.20 range in some parts of the US. Heating oil prices are nudging up toward $1 a gallon.
Any further increase by OPEC would balloon both parts of the equation, for Mr. Carter's decontrol program is geared to the consortium's prices. The higher these rise, the swifter US domestic prices climb to meet them.
Some key officials doubt, however, that OPEC prices will rise again during the year -- barring a sudden disruption of supplies -- because world supply and demand for oil are roughly in balance.
If supplies should drop more steeply than expected, cautions McGraw-Hill Publications Company in its 1980 energy outlook, gasoline prices could rise to $ 2 a gallon by the end of 1980.
Because of the expected economic slowdown in the US, the United States may import on average only 7.4 million barrels of oil daily in 1980, compared to about 7.8 million in 1979.
In late March the US and 19 other industrial powers, all members of the International Energy Agency, will meet to set oil import targets for 1980.
President Carter is expected to name a goal well above the 7.4 million barrel-a-day figure to give himself and the nation some leeway.
Because industrial economies throughout the world are slowing down, a drop in OPEC production of 2 million barrels a day -- from last year's 31 million barrel average to 29 million this year -- could be sustained by oil importers without hardship, experts say.
President Carter, meanwhile, has decided against imposing a retail tax on gasoline, despite the urging of some of his key energy and economics aides.
Mr. Carter's political advisers, including domestic affairs chief Stuart Eizenstat, strongly opposed a tax on gasoline because of its impact on lower-income Americans.
The President's top economic and energy advisers, by contrast, believe that pricing oil at the world market level is the best way to enforce conservation and reduce US dependence on foreign petroleum.
Key energy officials share the conclusion of the Central Intelligence Agency that sometime in the 1980s the Soviet Union, currently the world's largest oil producer, will become a net importer of oil.
This has led, during the current administration debate over what technology to sell to Moscow, to proposals not to withhold "low technology," as one official put it, that might boost soviet oil and gas production.
The sooner the Soviet Unionbegins to compete with the US, Japan, and Western Europe for Middle Eastern oil, this argument runs, the harder it will be obtain oil and the faster OPEC prices will rise.
Currently the Soviets, by supplying most of the petroleum needs of Eastern Europe and even exporting some of the West, help to relieve pressure on world oil supplies.