Yerington times. [volume] (Yerington, Nev.) 1907-1932, 1920-04-14
WY THE PRICE OF
GASOLINE ADVANCES


COMMISSIONS letter of March 10. con
corning the recent increase i'll pctro
leum prices:
Gcntlcmen
In reply to your open letter Of the
10th instant. asking for the causes that
led to our recent advances in price Of
fuel oil and gasoline we beg to state:
The Pacific. Coast supply OF fuel
oil and of petroleum. products is rap
idly approaching exhaustion. Since
May |. 1915 crude oil stocks in Cal
fornia have decreased from over 60,
OCC,000 barrels to 2S,7jS.02l berrels
on March l. 1920 The available sup
ply OF crude oil in stock is today
less than thirteen million barrels.
The balance of the stock is taken up
in the factor OF safety of 100000
barrels. which the Petroleum Com
mittee OF the State Council of De-
Tense found essential to the safety of
Pacific Coast indutries. and i'll the oil
i'll pipe lines and tank Bottoms. which
the same committee estimated at
100000 barrels per day.
1t must be obvious to your Hon
orablc Commission that those en-
gagged in the oil industry view this
condition with serious and just alarm
The condition is not temporary
one, but the elimination of steady
growth Stocks for the past five
years have declined; consumption has
increased and prices for crude oil
have mounted. But no advance in
the price of crude oil has been made
by this company for nearly two years,
or since May L. 1918, when. at the di-
rection of the United States Fuel
Administrator. all marketing oil COM
panies advanced the price which they
paid for crude oil at the well 25c a
berrel, and the price at which they
sold fuel oil lSc barrel
In the mainline, the present normal
consumption has grown until it now
exceeds the abnormal consumption of
war times. In 1918 the daily average
consumption was 1856 barrels; in
the last half of 1919 it was 1872 ,279S bar
rels; in January, 1920. 20l leo barrels
and in Fcbruay, 1920. 3O4,l2O barrels
Superimposed OH these figures is the
tact that 7COO barrels of fuel oil day
which formerly went to Arizona from
California. are now supplied from
Texas and Mexico. The existing
Shortage has developed therefore. in
face of the fact that 100000 barrels
of fuel oil has been restored to the
California supply.
Added to these considerations are
the demands OF the Navy and the
United States Shipping Board. The
former estimates it's 1920 requirments
on the Pacific coast as 1850, 800 bar |
reis, as against l.532,65O barrels in
1919. The Shipping Board has invited
bids for 1920 for 100000 barrels.
The California market for fuel oil |
and its products has ceased to be OF
local interest only. ECONOMICALLY it
has acquired national and interna-
tional Importance. The United
States Shipping Board is establishing
oil fueling stations throughout the
world and will supply these points
IRON the cheapest market. Thus
California will be drawn upon or
spared in the relation that California
prices bear to prices elsewhere. Even
at the new pricethis oil market is
lower than many other points with
which this market is in competition.
The inevitable result will be that the
Pacific Coast will be further drained
OF its supply by buyers who seek the
cheapest market. Shipping Board
vessels havve already sought cargoes
fuel oil which formerly were obtained
i'll Mexico, so that the Mexican car
go coud be released for the Atlantic
Coast.
1t is obvious that there will not be
enough oil to go around, unless
!. Production is increased.
The demand conserved
We know OF no other step TO ac-
complIsh these results except an in
crease in the price paid for crude OIL
and III the price at which fuel oil is
sold. The same reason which actual
ed the Fuel Administration in 1918 in
ordering price increases in order to
stimulate production, and to con
serve the supply, actuate us now. The
condition today is even more serious
man It was in 1918, for California
stocks are 100000 barrels below the
figure It was at that time and con-
sumption OF California IL