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Cold Consolation. That amounts to a call for voluntary rationing, and it could be at least a temporary substitute for formal, coupon-type rationing. Simon promises to announce a decision on outright rationing by New Year's; the strong indications now are that it will be no. Some energy bureaucrats say that voluntary conservation measures are expected to save 2.7 million bbl. of oil per day in the first quarter of 1974, and that U.S. imports of oil are running 700,000 bbl. per day higher than expected, indicating some leaks in the Arab oil embargo. Thus the gap between oil supply and demand in the next three months may be much less than the 3.3 million bbl. per day originally feared.
That, however, is cold consolation for motorists; whether rationing is voluntary or mandatory, the nation will still have to cut back sharply on the 6.7 million bbl. of gasoline that its 117 million cars, trucks and buses swallow each day.
Even if the Arab embargo were lifted altogether and U.S. refineries could get all the crude oil they need, they lack the capacity to turn out enough gas to keep consumption rising at its normal voracious rate. Simon already has asked refineries to cut gasoline production next year 5% below 1972 levels—or 15% below expected demand—in order to free more capacity for output of heating oil. The reductions may force some gasoline stations to limit each sale to even less than Simon's ten gallons.
As it gets scarcer, gasoline is bound to become still more expensive. By Nov. 30, the national average price of gasoline at the pump, including taxes, had already leaped to about 43¢ per gal., from 37¢ in January. Last week the Cost of Living Council permitted a boost in U.S. crude oil prices that will add another 2.3¢ per gal. on both gasoline and heating oil. Arab and other producing nations are now huddling to decide on further boosts in the foreign oil price, following hikes of 70% or so imposed at the beginning of the boycott, and Washington is still talking of raising taxes in order to discourage gasoline use. About the lowest figure at which economists predict that the pump price of gasoline is likely to settle is 60¢; other guesses range up to 80¢, $1 and higher.
Heavy Loser. That climate of scarcity and skyrocketing gasoline prices is ominous news for what auto executives like to call the "full-size" auto. For years, the family car has been moving away from economy; the typical 1974 General Motors passenger sedan (Chevrolet Impala, Oldsmobile 88 or 98, the average Buick) gets only about 10.5 miles to a gallon of gasoline in city driving, down from 13.7 m.p.g. in 1968, a performance not too different from industry averages (see chart page 22). The main reason has been added weight and luxury. The average full-size U.S.-made sedan now weighs more than 4,000 Ibs., up 22% since 1965 and more than half a ton heavier than its European or Japanese equivalent.
Actually, people probably are more worried about not being able to get gasoline than about what they might have to pay for it. Fuel is not a car owner's biggest expense; depreciation is. Still, if prices hit 60¢ a gal., then a motorist who drives 15,000 miles a year in a car that gets 10 miles to the gallon would pay $900 annually for fuel; if he were to trade in that car for