Not as Fast, Not as Fierce

The Administration may have quietly laid to rest its oft-proclaimed, oft-abused 3.2% wage-price "guideposts" last month, but it did not entirely give up the idea of restraint. As far as prices go, warned the President's Council of Economic Advisers, there are still plenty of areas "about which guidepost questions might be raised." The questions, and a flock of the old familiar Administration telegrams, flew last week in one of those areas: gasoline prices.

Two weeks ago several major suppliers increased the price they charge dealers by six-tenths of 1-c- per gal., or about 2.5%. Except on the West Coast, which has long been a price-war battle ground, the increase has become general over most of the nation -- meaning that motorists will be paying 1-c- per gal. more for their gas.

Hold the Line. The Administration's reaction, when it came at midweek, did not seem as fast -- or as fierce -- as in past price-increase attempts. Messages to the major suppliers did not come directly from the White House or the CEA but from Acting Interior Secretary Charles F. Luce, who mentioned "press reports" of the hikes and urged that they be rescinded in view of "the national interest in stable prices." To companies that had not yet followed the increases, including Humble Oil, went requests to "hold the line."

Some of the suppliers agreed to talk it over with Interior, but there were signs that the industry would hold its own line rather than the Administration's. Cabling in reply, Phillips Petroleum President Stanley Learned told Luce that he "appreciated your concern" but felt that the industry could not "continue to absorb cost increases." Sinclair, citing higher costs and depressed prices over the last decade, also said nothing doing.

Tougher Taxes. The gasoline producers have been anxious to beef up their profit margins ever since 1965, when a long and costly series of price wars finally faded away. Though retail prices, excluding taxes, indeed rose nearly 4% during 1966 to about 22.1-c- per gal. --matching the high 1957 level -- the suppliers have a number of problems. Demand continues strong and refineries are being forced to pay more for crude oil. Labor settlements early this year have increased industry wages by 4%; dealers, also squeezed by higher wages, have long been screaming for fatter prices at the pump.

The yearlong rise in gasoline prices may make the current boost less defensible in the Administration's eye than the recent increases pushed through by copper, steel and aluminum producers. A fact to remember, however, is that even at the new levels motorists would be paying about the same for gasoline as they did ten years ago had not federal and local taxes, now an average 10 1/2-c- a gallon, grown by 15% in that time.

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