Gasoline stations are violating price regulations at a higher rate than any other industry under government price guidelines, an Internal Revenue Service survey shows.
About 20% of service stations checked were selling gasoline above the legal ceiling price, the agency said.
Federal energy chief William Simon told The Milwaukee Journal’s Washington Bureau Thursday that the Internal Revenue Service was intensifying its crackdown on price gouging. He said the IRS was training an additional 1,000 investigators – bringing the total number available to the Federal Energy Office (FEO) to about 2,500.
In addition, he urged consumers to complain to their local IRS office whenever they believed they were being overcharged. He said consumers should get receipts from service stations whenever possible so they could receive any refunds that were ordered.
Acting Atty. Gen. Robert Bork sent telegrams to 94 US attorneys last week advising them to seek restraining orders against gasoline price gouging, Simon said.
Most of the violation probably do not involve flagrant price gouging, in which motorists are charged $1 or more for a gallon of gas, an IRS spokesman said. But the number of such serious violations is increasing.
The spokesman said it appeared that an increasing number of gasoline stations were using various gimmicks to get around the government’s price regulations.
*Excerpt from “Gas Price Gouging on Rise,” The Milwaukee Journal, January 2, 1974.
You probably believe that consumers had to wait in long lines to buy gas in the early 1970s because of the OPEC oil embargo. Annual data on imports available from the Energy Information Administration indicate that oil imports from OPEC nations increased each year from 1968 through 1977. (I don’t find monthly data on a cursory search, though it would be more revealing of conditions during the months of the embargo.)
The newspaper clip above reminds us that U.S. government price controls were hampering oil industry adjustments to higher world oil prices and changing supply conditions. A little common sense is all that is needed to realize that consumers don’t stand in line to pay too-high prices, but will stand in line for underpriced goods (whether due to sales promotions or government price controls).
A related story, “Gas stations worst violators” (The Miami News, January 3, 1974), elaborated on gasoline retailers’ adaptations to price controls: “According to the [Federal Energy Office] spokesman, the gimmicks used include service charges for each gallon of gas, requiring consumers to get a car wash along with a full tank of gas, or making them buy other products at inflated prices.”
The rest of The Milwaukee Journal story is included in the continuation below.