Petrol Prices

Press, Volume LXXXIX, Issue 27213, 3 December 1953, Page 10

Petrol Prices

There was not much merit in the Opposition attack in Parliament on the Government’s maintenance of the price of petrol, pending the establishment of the National Roads Fund. The Minister of Agriculture (Mr Holyoake) put the point fairly when he asked if it would have been sensible to reduce the price two months ago and then raise it to provide roading funds. It is true that for two months motorists have been paying more than was necessary; but this has made the introduction of the new roading system much simpler; and the extra money has not gone to petrol companies or anyone else. It is held, as it were, in trust as a cushion against any price rises in the interval and possibly to permit a decrease later. Just how this pool method works to the advantage of the motorist was shown at the end of 1949, when the devaluation of sterling w*as expected to raise the price of petrol by 3d to 4d a gallon. The then Minister of Industries and Commerce (Mr i Nordmeyer) found it necessary to deny reports that an announcement , of a price increase had been deferred only because of the election. As it happened, the balance in the pool account was sufficient to keep the price of petrol down in New Zealand long after it had risen in the United Kingdom, Australia, and South Africa. Even when the in-

crease finally had to be made in I May, 1950, it was not 3d or 4d but 1 2d. The present substantial surplus 1 in the pool has built up very rapidly. | Only a year ago, because retail j prices had been below cost, the debit I in the pool was so great that the ; price had to be increased by 2d a J gallon. The pool is an essential part ‘ of the mechanism for controlling ■ and standardising prices, levelling . out the wide variations from ship- 1 ment to shipment. It may be noted, ' incidentally, that although the

petrol tax has now been increased by 3d a gallon it is still only Id a ! gallon more than it was before the i present Government came into power. The principal difference is that all of it will now be spent on roads—one of the most important : and valuable decisions made by the Government. The Government is, however, open to criticism for following the bad example of the Labour Government in refusing to give the public information about the state of the pool account, although, apparently, motor union representatives have been informed sometimes. No reason has been given for this secrecy about a matter which is as much the business ,of motorists as it is of the oil companies. One very good reason why the public should not be kept in the dark is that secrecy can give rise to the impression that there is something to hide or to the charge that the pool can be used for political purposes. The Government would be wise to take the public fully into its confidence. The public are also entitled to more information about the claim of petrol resellers for a wider margin for handling this trade. Most motorists firmly believe that resellers are already very well paid for the service they give in a highly protected industry. If the motorists are wrong it would be in the interests of the Government and the resellers to show, before any change is made, why the margin should be increased. An increase in the margin would not immediately affect the rei tail price, but only because it could be met from the pool balance. This i would conceal, but not alter, the fact . that the rise was being met from ■ the motorists’ money.