Mobil settles feud with Govt, forgoes $30M price increase

Press, 1 May 1980, Page 8

Mobil settles feud with Govt, forgoes $30M price increase

NZPA Washington The Mobil Oil Corporation, America’s second-largest oil concern - and third biggest company, has settled a bitter feud, with- President Carter who had accused it of overcharging customers a total of SUS4S million last year. At one stage, the President accused Mobil of being “the most irresponsible company in America’’ and the White House -spokesman, Jody Powell, suggested that consumers should boycott their products. . The row began when the White House charged .that Mobil had violated the Administration’s voluntary price restraint guidelines by raising . prices in . the. . third quarter of? last year. ' ■ - /

The President named Mobil publicly in a speech last month, saying it had refused to take “corrective action.” His spokesman said the company had been asked to reduce petrol prices by 3c a gallon for 90 days to make up what it had overcharged, adding: “The American consumer has the right to know and. the right to-be prudent and frugal in their selection of products.” - - - - Mobil rejected the accusations, taking prominent advertisements. in leading newspapers headed, “Sorry, Mr : President; you’ve been misled.” ‘ f.

The company said it had not violated-;:-the guidelines,’ but “the rules of diie game

were changed retroactively.” After a series of top-level meetings, a settlement was announced, with Mobil agreeing to forgo SUS3O million in permissible price rises to offset the alleged overcharges. The other SUSIS million was dropped, with the Administration accepting that this had resulted - from Mobil’s agreement... to build up supplies of home-heating oilat tbe Government’s Tequest.'

A White House statement said Mobil had endeavoured to- interpret and apply the price guidelines in good faith and the “honest differences of opinion” had been the cause of the dispute. ! Commentators said consumers? would not notice I much effect from

ment. There will be no price cuts, but Mobil will not raise future prices for a while as much as it otherwise might. In a separate case, another concern, 'the Phillips Petroleum Company, also agreed to forgo price rises totalling SUSB.B million for a similar alleged violation of the guidelines.

During the row with Mobil, the White House noted that the company’s total / profits in; 1979 were SUS2OOO million, . against SUSIIOO million the previous year. ' Mobil has just announced that it more than doubled its operating profits in the first quarter of this year—SUS 922 million, against SUS 449: million./ ■.'■■■.?/’' . '/? . \