Energy Prices

Pushing Russia a step nearer to the world economy, President Boris N. Yeltsin on Thursday ordered domestic prices for oil and oil products nearly doubled. To protect his country's already exasperated consumers, Yeltsin unexpectedly incorporated a novel mechanism in his decree that will penalize refiners who try to gouge the public: Above a certain government-mandated level, higher prices for petroleum and its byproducts will now automatically trigger much higher taxes.

The biggest drop in energy prices in nearly seven years wiped out U.S. inflation in January. Consumer prices overall were unchanged, marking the first month without an increase since January 1994, the Labor Department said Tuesday. "Inflation remains utterly absent," said economist Bruce Steinberg of Merrill Lynch.

A coalition of small Southland manufacturers warned Thursday of serious economic fallout from exploding electricity and gas rates, calling on federal regulators to cap wholesale energy prices to head off a recession in the nation's largest manufacturing center.

President Bush and Democratic leaders decried the rising cost of energy Saturday, but Bush implicitly blamed Democrats for outmoded environmental restrictions while Democrats explicitly blamed Bush for favoring the energy industry over consumers. Speaking for Democrats, California Gov. Gray Davis said the energy plan that the president unveiled Tuesday would do nothing to alleviate the immediate threats of rising gasoline prices and blackouts in California.

Surging energy prices in the United States gave oil, gas and power companies new fuel in their ascension of the annual Fortune 500. Exxon Mobil surpassed General Motors, rising to No. 1 from No. 3 thanks to the oil giant's record-high $210 billion in revenue for 2000. GM, which had revenue of $184.6 billion, fell to No. 3. Other energy companies fared well in 2000, with Enron, at No. 7, rising from No. 18. Duke Energy shot up to No. 17 from 69 and Reliant Energy made it up to No. 55 from 114.

Uneasy investors sent stocks mostly lower Tuesday as oil prices climbed above $51 a barrel, prompting fresh worries that rising energy costs would curb consumer spending and corporate profits. The selling on Wall Street was relatively subdued, particularly compared with other oil-related declines in the recent past. Nonetheless, the jump in crude futures in New York to $51.09 a barrel, up $1.

California's spike in energy prices is creating a season of pain for public institutions and nonprofit agencies that run on thin budgets and cannot pass along surging costs to those they serve. For a high school in Agoura Hills, a ballooning gas bill means turning down the thermostat on a pool used by shivering swimmers. For a group of San Diego hospitals, an extra $570,000 a month in electricity bills means slicing into a bare 1% surplus.

Two high-profile energy science experiments were conducted this summer, quite against the subjects' will. The guinea pigs were California electricity customers, particularly in San Diego and south Orange County, and motorists around the country, especially those in the upper Midwest--all of whom paid record prices for the respective forms of energy. The less-than-scientific conclusion: Consumers and business will use less of these commodities when prices shoot through the roof.

Pushed by another big jump in oil prices, wholesale prices surged by a surprising 1.1% in October, intensifying concern about the impact of inflation on the fast-weakening economy, the government reported Friday. The October increase, the third month in a row that this key inflation index has surged by 1% or more, brought the rise in the department's overall producer price index so far this year to an annual rate of 7%--the steepest such gain since 1981.

With a California-born electricity crisis spreading like a range fire throughout the West, there were signs of softening Tuesday in opposition to a federal cap on wholesale power prices. A second member of the Federal Energy Regulatory Commission, which has steadfastly opposed wholesale caps on electricity, said she might be willing to discuss a price ceiling--a significant breakthrough for California officials, who have been pleading for price caps for months.