New-York tribune., 1922-08-08
Oil Refineries
Losers, Senate
w illness Says
Drop in Gasoline Price
Due to Lower Cost of
Crude Petroleum; Com
tinuity Depends ON Pools
Monopoly Charge Denied
WeIch Declares the Country
Will Never Return to
Days of ll-Cent Product

From The Trfbunes Washington Bnredu
WASHINGTON, Aug. Toll rehners
have lost money on gasoline and other
petroleum products since 1920, accord
ing to Robert l.. Welch, counsel for
the American Petroleum Institute, who
appeared before Senate subcommittee
Investigating the prices Of gasoline at
it's first session to-day. Recent de-
clines in the prices Of gasoline, Mr..
Welch testified were due to drop in
the price Of crude petroleum. He
added that continuity Of the supply of
the crude will be dependent on the
discovery of new and important pools
The witness, who is also secretary of
the institute, with Offices at Is West
Forty-fourth street, New York, insisted
there was genuine competition in the
oil and gasoline industry. The mem
bers of the subcommittee, Of which
Senator McNary, of Oregon, is acting
chairman, were unable to reconcile this
with recent report of the Federal
Trade Commission which took the
\
through interlocking stock ownership
of its units, has grip on the business
which has not been broken by the Su-
preme Court decree.
Tomorrow the committee will
resume and Mr.. Welch will be cross
examined Heretofore the work of the
inquiry has been preliminary, consist
ing chiefly in sending out question
naires to the leading oil and gasoline
companies and assembling informa-
tion in the replies. Available data on
the subject of gasoline and oil in the
hands of the government has also been
assembled. Gilbert E. Roe, counsel for
the subcommittee, and government
experts were present, but they did not
question the witness.
Mr.. Welch testified that he knew of
no company that controls the market
ing Of gacoline or oil products. He
indicated that the Standard Oil did not
dominate the marketing or the produc-
tlon. Throughout his testimony Mr.
Welch discussed especially the condi-
tions in the kansas-Oklahom Texas
field, the leading one of the country
He said that in this field the Standard
did not produce over Is per cent and
as to the marketing, he said that in
the territory east of the Rocky Noun
tains the Standard ran 475,O0O barrels
day, in comparison with over 600 O0O
by other interests.
May l, 1922, according to Mr. Welch
the total cost of barrel of crude oil
to the refiner and the cost Of refining
was not less than 1926. He said SO
per cent of this was gasoline, IL pei
cent kerosene, As per cent fuel oil, 3
per cent gas oil and per cent waste
lie testified the refner got 15b cents
+. o. b. tank car for gasoline at the re-
finery, 3.38 cents per gallon for kero-
sene, 1856 cents per gallon for fuel oil
and 2.75 cents per gallon for gas oil
From this, he calculated the refner re-
ceived $273 for what was produced by
barrel of crude oil and thus lost 22
cents on each barrel.
"The refner loses % cents per bar
rel for every gallon refined" asserted
Mr.. Welch. "We have this unfortunate
situation: On the one hand, the pub
lie is complaining of paying too much
on the other hand, the refiners in re-
cent months have gone through the
most disastrous period of their his
tory"
Mr. Welch said the country would
never return to the days of the l1-cent
gasoline. When the price reigned he
said, crude oil was selling for rs cents
a barrel.