Bargain Fuel

A scheme for cheap oil

The tanker Concho chugged into the harbor of Chelsea, Mass., late last month carrying 8.4 million gallons of heating oil. An everyday occurrence, with one important exception: the fuel on board cost only 47-c- per gal., or about two-thirds the normal 75-c--per-gal. wholesale price. The importer was the nonprofit Citizens Energy Corp. (CEC), headed by Joseph P. Kennedy II, 27, eldest son of late Senator Robert Kennedy. A vociferous critic of the energy firms' "greed," the young Kennedy was out to prove that oil companies were ripping off the public.

Arguing that prices could be lowered by eliminating the middlemen's profits, Kennedy jetted off to Algeria, but found no crude for sale. Later he approached Saudi Arabian Oil Minister Sheik Ahmed Zaki Yamani and Venezuelan President Luis Herrera Campins. Finally the Venezuelan oil company Petroven agreed to sell him nearly 1 million bbl. at the world price of $26 million. Chase Manhattan Bank provided the necessary credit line. A Puerto Rican refinery in the middle of bankruptcy proceedings agreed to refine the oil and transport it in return for a share of the refined products. The state of Massachusetts, using federal fuel-for-the-poor funds, bought the oil and distrib uted it to 7,500 needy households.

Though Kennedy insists his ploy could easily be duplicated, some industry experts are a bit skeptical about the new oil bar on's gambit. Says Mark Emond, editor of the authoritative oil publication the Lundberg Letter: "It takes a huge credit line; it takes a relationship, or influence, or something." In other words, it is quite easy to cut fuel prices if you have political clout, a large credit line and access to a bankrupt oil refinery. It also helps if your name is Kennedy.

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