Capital journal. (Salem, Or.) 1919-1980, 1920-03-22
Gasoline Prices
Raised toStablize
Market is Claim

San Francisco, Mar. 21-The Stand.
ard Oil company of California. through
its president, K. R. Klngsburv. in an
open letter today addressed to the
state railroad commission, defended Its
recent advance in fuel oil prices 'in
the hope that an increase of twenty.
live cents a barrel would stimulate
production and restore the balance be-
tween supply and demand"
The letter was issued as a result NJ
an inquiry addressed to the oil com
pany last week by the railroad com.
mission asking why an increase was
necessary. As many public utilities
operate their plants with power oh.
tanned from fuel oil, the commission
said it believed the public should know
the reasons for the increase. The oil
situation in California, which the cer,-
pany declares to be serious. is review.
ed in detail in the company's letter
which points out that an increase N
price tends to conserve the use Of fuel
and to check the depletion of stocks.
This is the only known remedy"
On the subject of gasoline, which
the company says has an equal inter
est with that of fuel oil, the letter
says:
Gasoline must be kept at a price
level where it will not be shipped to
other markets in quantities sufficient
to deplete the California market. ror
example. at present time gasoline is
selling in New York at 2Sh cents a
gallon wholesale. Previous to the re-
cent advance here, it was selling at
1919 cents per gallon wholesale, a diff
ference of nine cents a gallon. The
rail rate to New York is seven cents
a gallon and the water rate not to ex-
ceed four cents. Obviously unless a
proper differential exists between the
Pacific coast price and the eastern
prices, Pacific coast gasoline will be
shipped east by wholesalers, jobbers
and others and sold at profit to the
complete decentralization of the local
market.
THAT the gasoline market is short
may be illustrated by the fact that
this company, to supply the require
ments of its trade, several months ago
purchased about 5O,00O,O00 gallons Of
gasoline in the mid-continent field
which the company is shipping 70
points customarily Supplied from Cali
fornia.
I'm this connection it may be noted
that the price of gasoline has remained
practically constant, compared to the
advance of other commodities In
July, 1919, the price Of gasoline on
this coast was increased one cent per
gallon. This was the only advance that
had been made since December, 1916,
except an increase Of half a cent a
gallon, which was ordered in 1918 by
the fuel administration to absorb the
general freight increase throughout
the country"
THE Pacific coast supply of fuel of
and of petroleum products is rapidly
exhaustion. Since May !,
1915, crude oil stocks in California
have decreased from over 10000. 600
barrels to 2S,73S,921 barrel on March
1, 1920. The available supply Of crude
oil in stock is today less than 13,000,-
900 barrels. The balance of the stocks
are taken up in the factor of safety on
100000 barrels which the petro
leum committee of tie state councs, y,
defense found essential to the safety
of Pacific coast industries, and in the
oil in pipe lines and tank bottoms
which the same committee estimated
at 100000 barrels not available for
use.
'At the present rate Of consumption
and of production the available stocks
will be exhausted in about twelve
at which time consumers of
California fuel oil will be cut off from
between $4,000 and 10000 barrels per
day.