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Double, double oil and trouble
The second row of the north parking lot at our Yonkers office is reserved for vehicles we've just tested. As I write, the six vehicles you'll read about in our August 2004 Small cars report are lined up next to crew-cab pickups from the July 2004 report (both reports available to subscribers). Godzilla meets Tom Thumb: At 11 miles per gallon overall, the Dodge Ram 1500 is one of the thirstiest vehicles we've tested. At 33 miles per gallon, the manual-transmission Mazda3 is among the more frugal. For the first time in a decade, we also ran fuel-economy comparisons of manual and automatic versions of each of this month's small cars. Our interest in fuel economy is longstanding. But we've revved up coverage (See our August 2004 report, Fuel economy vs. performance) because of sticker shock at the pump. If today's gas prices reflected a reasonable profit over production costs, we might not complain. But they don't, as Consumer Federation of America and Consumers Union, publisher of Consumer Reports, reported in May 2004. Among their findings: • Price hikes were not caused entirely by production cost increases. Indeed, petroleum industry profits have risen to record highs. U.S. oil companies have been swimming in after-tax profits that exceed by $50 billion to $80 billion the profits they enjoyed from 1995 to 1999. They're on track now for another banner year. • A wave of mergers in the 1990s whittled 34 major oil and gas companies down to 13; 15 refining companies were whittled to 7. This consolidation reduced competition and with it, the impetus to lower prices. • Tight markets and high prices in the U.S. would ease fastest if we used less oil by developing more energy-efficient products. But the energy bill that Congress is considering doesn't do enough to boost efficiency requirements for the most energy-hungry products, such as automobiles. So what to do? • Automakers need to improve vehicles’ fuel economy. Doing so now at the same rate achieved in the 1980s would find Americans using 1.5 million fewer barrels of oil per day than the 20 million barrels per day we currently use. • Congress should push the National Highway Traffic Safety Administration to increase fuel-economy standards and include the likes of Ford Excursions and Hummers, which are so heavy, they fall outside current regulations. • Oil companies should be required to increase the level of oil they hold in reserve so that temporary shortages don't cause price spikes. • The Federal Trade Commission should investigate oil company practices and make public the results. You might find some help in your search for reasonably priced gas at www.gasbuddy.com, a portal to Web sites nationwide that list less-expensive gas stations in your area. For more information about what Consumers Union is doing, go to www.consumersunion.org.
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