Out of Gas?

Said Ralph Kenneth Davies, former Deputy Petroleum Administrator, to a Senate committee: "We do not face an oil shortage, we are in the midst of one--now."

There was evidence last week that Davies was right. The Federal Government, which recently invited bids for 224 million barrels of fuel oil to heat Government buildings and hospitals, got offers of only 19 million barrels. The Army and Navy were just as short. Part of the trouble was that the big oil companies were in a furious "brand" race to capture larger portions of the civilian market. But the biggest trouble was that the U.S. is burning up 5,353,000 barrels of oil a day--and producing only 5,264,000. Even with imports, storage reserves were dropping.

The 22 big companies are unofficially rationing their fuel-oil dealers and refusing to take any new customers. Last week they asked the Department of Justice to promise immunity from antitrust laws if they limited all dealers to their 1946 quotas plus 10%. The balance would go to the military and Government. The Department refused, saying it could be done without immunity.

Some Government officials darkly suspected the big companies of starving the armed services to bring increased pressure for 1) congressional approval of the Anglo-American oil agreement (TIME, Oct. 8, 1945), 2) more imports from the Middle East. With small independents fighting the agreement, it looked as if it would be shelved this session anyway.

Even the pessimists did not expect the shortage to get anywhere near as bad as it was in wartime. But they did expect it to bring higher oil prices. And next autumn, when the heavy drain begins on fuel oil storage, some local tanks may be dry.

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