The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1919-05-03
HIKE IN Gas
PRICES COMING

It is predicted, and with reasonable
certainty, that this coming summer
the price of gasoline must go up, &C
cording to writer in Motor Age. This
has been brought about by the abrupt
disappearance of a market for fuel oil,
which it was believed would continue
well into 1919, and possibly to 1920.
The allied governments during the
war made tremendous demands on the
fuel supply of America Fuel Oil com
manded a good price, and it was this
alone which enabled the refiners to
offer gasoline at the restricted gov
eminent price and still operate the
refneries at net profit, they state.
With the end of the war came the
end of the demand of fuel oil, with the
result that the price dropped to about
so cents a barrel, or 1.6 cents a COLON.
When it is considered that last sum
mer the price of fuel oil was about
$3.50 barrel, or cents a gallon, the
deficit is very apparent. The most
| logical expectation is that the price
of gasoline will rise.
The present situation is considered
serious by the reiners. The total ca
| pacity of the mid-continent refneries
is about 100000 barrels of crude day.
| Operation is cut to third of this ca
pacity, resulting in the production
of about $4,000 barrels of fuel oil a
day, for which there is no market. If
| the refineries are to continue, a mar
ket for these $4,000 barrels must be
| found, the oil men say.
No Demand for Oil.
/ The country's oil experts can see no
coming demand for this fuel oil, but it
is expected that the demand for gaso-
line is going to be so tremendous that
the refneries will have to operate at
full capacity. Result, more fuel oil to
get rid of. The storage facilities of
the country fast are becoming tempo
, rary disposal stations for this oil.
Some progressive refiners are cutting
a low-grade gasoline, 1926 gravity,
and the heavy residue then is turned
| into road oil, for which there is good
demand.
Another opening for the oil is seen
in the cracking processes. Standard
Oil is expected to absorb quantities of
this oil to be converted into gasoline it
controls. The cracking output is about
SO per cent. of the crude taken in.
Other refners who do not have the
advantage of the Standard Oil patent
ed process can produce about Is per
cent of the amount taken in.
Some refiners will be forced to burn
the fuel oil under their stills instead
of coal. Here is another place where
a great quantity of oil can be disposed
of, and the results probably will be
better than the best that could be ex
pected of coal. In addition there
are several longtime contracts with
the railroad administration which also
will help out.
All these conditions offer only q
partial market, however, and it is
not expected that these openings car
affect the situation as whole. The
fact remains that the profits from
fuel oil are gone, and these were the
profits that sustained the refners
business, they say. The conditions
now will have to be reversed. The
gasoline profits must do the support
ing, and to do this the price must &c
up.
Five cents a gallon is the estimated
increase for gasoline. With this ex
ira price it is expected the reiner car
sell his fuel for whatever he can ge
and still be able to run his plant a
a profit.