Before the Federal Energy Regulatory Comission: In the Matter of Motor Gasoline Deregulation and Transition Regulations

by Barry Bosworth on December 23, 1977
by Barry Bosworth, Roy A. Nierenberg and Vartkes L. Broussalian

The Council on Wage and Price Stability today urged the Federal Energy Regulatory Commission to reject a proposal by the Environmental Protection Agency on the exemption of mote gasoline from the Mandatory Price and Allocation Regulations. The EPA proposed that the Commission seriously consider insttuting “new controls” on the retail price differentials between leaded and unleaded gasoline in order to discourage switching from unleaded to leaded gasoline in automobiles equipped with catalytic converters. Such switching, the EPA maintained, destroys the effectiveness of the catalytic converters and increases air pollution. The Council’s statement opposing EPA’s proposal was prompted by the likely inflationary impact of EPA’s proposal stemming from the large costs that consumers as a whole would incur. Moreover, freezing the differentials would likely lead to elaborate and pervasive controls on the retailing, distribution and refining segments of the industry. The Council, suggested that EPA should consider less inflationary alternatives to ensure compliance with EPA’s own regulations relating to automobile emissions.

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