Laserfiche WebLink
<br />2-13 <br /> <br /> <br />r' <br /> <br />cost pass-throughs for propane to no more than the proportional share of <br />crude oil cost attributable to that product. Refiners may increase prices <br />of gasoline by 10 per cent of the total cost of crude oil allocated to gaso- <br />line.37 All pricing and allocation control authorities expire on September 30, <br />1981, unless Congress enacts further legislation. The President has <br />authority, however, to decontrol prices prior to September 30, 1981. <br />The petroleum products market is composed of refiners, wholesale- <br />resellers, and independent retail dealers. There are 15 large integrated <br />refiners, four large independent refiners, and approximately 120 small <br />refiners in the US. The wholesale-resellers category includes independent <br />wholesalers, consignees, terminal operators, brokers, and jobbers serving <br />both branded and non-branded retail outlets. Independent retail dealers <br />generally rent outlets from their suppliers, either refiners or wholesale- <br />resellers; through some lease outlets from a third party.38 <br /> <br />2.2.8.1 Product Price Controls. ERA regulations require that petroleum <br />product prices be calculated on a fixed-date-price cost-plus method. <br />Refiners are allowed to charge prices above the "base price" which reflect <br />increases in non-product costs, such as labor, rent, utilities, marketing, <br />and pollution control equipment. The "base price" is the weighted average <br />price at which the product was sold to classes of purchasers on May 15, <br />1973, plus (or minus) the increased (or decreased) cost of crude petroleum <br />and purchased products incurred since that date.39 Such accrued petroleum <br />and product costs may either be passed along or ban ked to justify later <br />price increases. Costs not allocated to propane may be attributed to <br />gasoline, but not vice versa. <br />Wholesale-resellers and retailers are similarly restricted in their cost <br />pass-throughs, including the requirement for allocating propane costs to <br />gasoline, but not the reverse.40 Prior to May 1980, gasoline resellers <br />were subject to a complex system that limited their mark-ups on a cents-per- <br />gallon basis depending on sales volumes. In May 1980, resellers could <br />elect either to continue under this system or to follow a standardized <br />system which eliminates banked costs, volume restrictions, and transport <br />differentials.41 <br />