The Press THURSDAY, DECEMBER 27, 1973. Petrol prices

Press, Volume CXIII, Issue 33418, 27 December 1973, Page 8

The Press THURSDAY, DECEMBER 27, 1973. Petrol prices

The effects of the latest price increase for crude oil announced by the Middle East oil producers will take some tune to reach New Zealand: inevitably the increase must force up the price for all importers of petroleum products, especially as other members of the Organisation of Petroleum Exporting Countries are also expected to raise their prices. Although New Zealand continues to have adequate stocks of petroleum products at the old prices to last for some veeks. at least, it is surely time the Government took stronger action than the modest restraints on usage imposed so far. On December 20 — before the Gulf States announced the latest increases in “posted prices " — tne oil companies in New Zealand had lodged an application with the Government for a price increase. They should have little difficulty in proving a case for an immedate rise of about 4c a gallon, when the full effect of the new posted pines is felt a further increase oi the same order is likely. The Government, fearing the effect of higher petrol prices on the cost of living, may be tempted to delay the first increase and subsequent increases — perhaps even to offset the higher landed cost of petrol by reductions in the petrol tax. at present 21c a gallon. A bolder course would be to increase the price as soon as possible, perhaps by more than appears to be necessary This would not only help to reduce consumption and preserve stocks at a time when continuity of supply for petroleum products is far from assured: it would also help to build up the pool fund which at present is used to level out minor fluctuations in the price New Zealand must pay for its petroleum imports. If the fund were to be built up substantially now it would provide a reserve to dampen the effect when higher prices have to be paid for imports. An extra 20 cents a gallon — an increase of 40 per cent — might seem savage to those intent on enjoying a burst of holiday motoring. But a price increase which deterred some users and built up a reserve fund might well prevent a serious shortage and formal rationing in the New Year. Even at 70 cents a gallon. New Zealanders would be paying rather less for their petrol than consumers in many other developed Western States. New Zealand's economy is better placed than many others to avoid the worst effects of the petroleum shortage and price increases. Nearly half the petroleum products used in New Zealand are motor spirits. A significant reduction in the amount of fuel consumed tn private motoring would leave adequate amounts for essential industrial uses. At the very least. New Zealand needs time to consider alternative sources of energy. After more than 20 years of cheap, unlimited supplies of fuel, motorists in this country should not object too strongly to paying more and using less fuel when the national interest requires it.