FIXED PRICE FOR PETROL

Press, Volume LXXIII, Issue 22134, 2 July 1937, Page 6

FIXED PRICE FOR PETROL

REGULATIONS FOR NORTH ISLAND AREAS

MAXIMUM WHOLESALE CHARGE ADOPTED

(TRESS *9aOClVTlu>i IEI.V'.UU.^U.I OPOTIKT, July 1. "In furtherance of the Government's intention to fix the price of motor spirit in the various districts throughout New Zealand, regulations determining the maximum wholesale price and the margin of profit to be enjoyed by resellers are to-day being brought into effect in the Taranaki. Wanganui. Shannon, Fox ton. Levin, and Paekakariki areas," said the Hon. D. G. Sullivan. Minister for Industries and Commerce, in an interview. "Strong representation from . these areas has been received by the Government to fix the price of motor spirit because of indiscriminate price cutting that was interfering with the legitimate reseller. It has been my desire to stabilise as far as possible existing conditions in the industry and a very intensive investigation into tne methods of sale and distribution in the areas to be covered by the regulations was carried out. When all the iacU were put before me. it was evident that some real problems presented themselves as the oil companies employed different methods of distribution.

■ "As indicated in previous announcements I had a further difficulty to face because of the advance in the wholesale price of motor spirit, which had risen through world prices having increased, and tanker freight rates had soared above the rates being paid by the oil companies last year." continued the Minister. "I am now satisfied that the prices set out in the schedule to the regulations are fair and reasonable after taking into account the changed overseas conditions. over which the Government has no control. . „_ „

A New Method

"Because of the difficult problems with which I was faced in the fixation of the price of petrol in the additional areas now to be covered, the regulations take a slightly different lorm from those operating in other fixed areas. The difference lies mainly in the fact that instead of gazetting a fixed wholesale price I have decided to adopt a maximum wholesale price and provide for tne usual fixed gross profit margin of 3d a gallon to resellers. Those wholesalers who have accredited, or B depot, agencies will .be permitted to allow these agencies whatever commissions they consider; are justified, but in" no case must the retail price be higher in the various defined areas than the maximum wholesale prices provided for in the schedule to the regulations, plus the reseller's margin of 3d a gallon. "I believe now that most of the difficulties that are likely to be met in pursuing a policy of fixation of petrol prices have been covered by the regulations to come into force to-day, and I therefore do not anticipate having any undue delay in bringing down regulations in other areas where the resellers have requested price fixation in accordance with the pre-election pledges of the Government." said Mr Sullivan. "Some of these investigations have already been carried out and I am hopeful that the respective regulations will be introduced very soon.

"In the district now to be covered by the regulations, strong representaI tions were made by the resellers about I the operation of co-operative dairycompanies in reselling petrol at reduced prices in competition with local I resellers. In this regard I met a re- ! presentative deputation of resellers in I Wanganui and indicated on that occa- . sion that I thought if an amendment Ito the Motor Spirits < Regulation of ! Prices) Act dealing with the granting ■ of rebates were introduced, so that coi operative dairy companies could dtstri- \ bute any profits made on the sale of ' motor spirit in such a way as not to contravene the relative section of the '■ act. their difficulties would be met. "It is my intention to do this at i the session of Parliament, and I feel that such action will further tend to stabilise the whole reselling industry in the areas- to be covered by price fixing regulations." added the Minister.