Auto Club: Today Marks the 30Th Anniversary of Lifting of the OPEC Oil Embargo; Events of 1973-74 Similar to Conditions in 2004

LOS ANGELES--March 18, 2004--On this day 30 years ago, nations comprising the Organization of Petroleum Exporting Countries (OPEC) lifted their 5-month oil embargo on the United States. An analysis by the Automobile Club of Southern California indicates that in terms of dependence on foreign oil and gasoline usage, the United States is in a strikingly similar place today as it was 30 years ago.

When the embargo began on Oct. 17, 1973, the price of a barrel of crude oil rose overnight from $3 to $5.11. It reached as high as $11.65 in January 1974. Crude oil selling on the spot market closed Wednesday at $38.18 per barrel, the highest level since 1990. In 1973, America imported 35 percent of its crude oil. In 2003, that number was a record setting 63 percent.

In 1973, the national average price of gasoline was 39 cents per gallon. In 1974, the average price rose to 53 cents. That represents a 27 percent rise, which is nearly identical to the price increase Southern Californians have experienced in 2004 to date.

In the early 70s, American-made cars averaged about 13 miles per gallon. Today, the top selling vehicles are heavy, eight cylinder models that average 22 mpg.

"Even though so much has changed in 30 years, motorists still are subjected to wide swings in gasoline prices," said Carol Thorp, spokesperson for the Auto Club. "Following the oil embargo, many measures were undertaken to cut down on the amount of gasoline America used. Now, like then, reducing demand for gas can be a very effective way of affecting pump prices."

Recently, the Auto Club launched a campaign to encourage Californians to reduce gasoline consumption by saving two gallons a week. With 23 million registered drivers in the state, each driver saving two gallons can bring demand for gas more in line with a limited supply.

Following the oil embargo, new laws were passed mandating fuel efficiency notices on new cars. The nation's speed limit was lowered to 55 mph, saving large amounts of gasoline and resulting in far fewer deaths and injuries on the roadway. In 1975, Corporate Average Fuel Economy (CAFE) standards were instituted, requiring that by 1985 automakers double average new car fuel efficiency from 13.8 mpg to 27.5 mpg.

"In recent years, automobile manufacturers have increased the overall energy efficiency of the vehicles they sell," Thorp said. "These gains have been offset as Americans continue to purchase larger, less fuel-efficient vehicles. The average fuel efficiency of new vehicles has remained almost unchanged in the last 10 years - about 22 miles per gallon."

The OPEC Oil Embargo was instituted on the United States on Oct. 1, 20037, 1973. Eleven days earlier, Egypt and Syria attacked Israel, starting the Yom Kippur War and nearly overwhelming the Jewish state. Within a week, with the help of the U.S. and other Western allies, Israel counterattacked pushing back the attackers. A cease-fire was signed in November. However, as retaliation for aiding Israel, OPEC cut off all oil exports to the United States and increased prices to Western Europe by 70 percent.

The Automobile Club of Southern California, the largest AAA affiliate, has been serving members since 1900. Today, Auto Club members benefit by the organization's roadside assistance, financial products, travel agency and trip planning services, highway and transportation safety programs, insurance products and services and automotive pricing, buying and financing programs. Information about these products and services is available on the Auto Club's Web site at www.aaa.com.