U.S. inflation sure to rise as Carter tries to curb oil use
NZPA-Reuter Washington Americans today face the certainty of increased inflation after President Jimmy Carter decided to lift controls on oil prices. In a televised address to the nation on Thursday night, Mr Carter ordered gradual removal of Government controls' on domestic oil prices over the next two years. This would bring prices up to the level fixed by the Organisation of Petroleum Exporting Countries, at present SUS 14.54 a barrel compared to the lowest United States price of SUSS.BO.
Together with recent O.P.E.C. rises, the move is expected to add at least 10c la gallon to the price of petrol, which, through higher transport costs will raise in turn the price of food and retail goods. The President also called for windfall profit taxes on the oil companies, but this is subject to 'Congressional approval and initial reaction from the most influential legislators was chilly. Mr Carter said the tax would produce at least SUSIO billion by the end . of 1982.
He proposed using this, money to shield the public from sharp fuel price rises by tax compensation to the poor, development of alternative energy sources such as- solar power, and aid for
[cheap public transport in the, big cities. “This is a painful step, and I’ll give it to you straight,” the President said. “Each one of us will have to use less oil, and pay more for it.” He estimated that the lifting of price controls, [ mandatory regulation of temperatures in Government buildings, and abolishing free parking for Federal employees could save America 1.5 million barrels of oil a day. But although leading legislators applauded his decision to remove oil price controls, they doubted whether he , could persuade Congress to , impose new taxes on the ■ powerful oil companies. , “I think the tax is in serious difficulty,” said Con- j gressman John Dingell, chairman of the influential!. House energy sub-committee. |, Senate Finance Committee | chairman (Mr Russell Long);, warned Mr Carter that [ Senate was unlikely to pass;, such taxes. The President clearly ex-i, peeled opposition to his tax; proposal and made a biting reference to the oil companies in his speech: ; “As surely as the sun will' rise, the oil companies can be expected to fight to keep . the profits they have not earned.” j Two years ago .Mr Carter , declared his fight for energy , conservation “the moral ‘ equivalent of war.”. But he 1 quickly had to drop a propo- i
[ sal for a tax on oil producers when it became clear that Congress would not pass it. “The energy crisis is real] .. . time is running short.” [ Mr Carter told his television! audience. Only seven years! ago petrol cost about 25c a (gallon in the United States.; It now ranges above "0c in; most areas. j The prospect of a dollar a ; gallon in a few months is no! longer regarded as a serious; disaster, compared to much higher prices in other Indus-1 trialised, but less affluent,! Western nations. Price controls, the Presi-i 'dent said, held down Ameri-i can production, encouraged’ waste, and increased depend-! ence on foreign oil. The United States now im-l ports about 45 per cent of; its oil requirements, mainly' [from Saudi Arabia, at a cost; [of billions of dollars a year. I I “We are dangerously! I dependent' on uncertain and’ iexpensive sources of foreign! | oil.” Mr Carter said. [ “Our national strength isj dangerously dependent on a! thin line of oil tankers! stretching half way around! the Earth, originating in the; Middle East and around the! Persian Gulf — one of the! most unstable regions in the! world.” Mr Carter said, the grow- [ ing dependence on foreign! oil had left the United, States exposed to sudden price rises and interruptions in supply.
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Press, 7 April 1979, Page 9
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628U.S. inflation sure to rise as Carter tries to curb oil use Press, 7 April 1979, Page 9
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