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![handle is hein.gao/gaobaacrc0001 and id is 1 raw text is:
DCCUMENT RESUME
03669 - [A2523714]
Costs of Cargo Preference. PAD-77-82; B-95832. September 9,
1977. 43 pp. + appendix (1 pp.).
Report to Pep. John M. Murphy, Chairman, House Committee on
Merchant Marine and Fisheries; by Elmer B. Stuats, Comptroller
General.
(3600); !ransportation Systems and Policies (2400).
Contact: Prcgram Analysis Div.
Budget Function: Commerce and Transportation: Water
Transportation (406).
Organizaticn Concerned: Department of Commerce.
Congressional Relevance: House Committee on Merchant Marine and
Fisheries.
Authority: H.P. 1037 (95th Cong.). H.R. 8193 (93rd Cong.).
The current version of cargo preference legislation
would require 9.5% of imported oil to be carried in U.S.-flag
ships. Witnesses before the House Committee on Merchant Mari'ne
and Fisheries presented estimates of the difference in costs
between carrying imported oil on U.S. ships protected by
cargo-preference legislation and the cost of carrying oil on
foreign-flag ships. Findings/Conclusions: Estijidtes of the
transportation cost differential ranged from 1.2 cents per
galIcn to 2.8 cents per gallon. The Maritime Administration
estimate was 1.6 cents per gallon. The differences in estintates
were due primarily to disagreement over the capital cost
differential between building ships in the United States and
obtaining ttem in wor2d markets. Estimates of costs to consumers
for all imported oil rangel from 0.1 cents per gallon to 1.0
cents per galln- Because of the wide dispersion in estimates,
GAO made its own estimates using a biwple average of operating
cost differentials which is about one-fourth of the total
diffcrential. A range for capital cost differentials, the major
source of variaticn, was estimated on the basis of different
assuwptions about world tanker prices. No firm conclusion was
reached on possible costs of retaliation by other countries,
since it could take forms other than adding to price. A
reasonable range of cost estimates would be from ahout 0.15
cents to 0.23 cents per gallon of imported oil. (HTW)](ViewImageLocal?handle=hein.gao/gaobaacrc0001&div=1&collection=&method=preview&ext=.png&size=3)