PRICE UP 11c 'Crisis surcharge’ on petrol

Press, Volume CXIV, Issue 33442, 25 January 1974, Page 2

PRICE UP 11c 'Crisis surcharge’ on petrol

The price of petrol rose 11c a gallon at midnight last night, making super-grade petrol 59c a gallon and standard 56c.

Diesel has risen 10c a gallon and heavy oil 7c a gallon as a result of an “oil crisis surcharge” approved by the Government and announced last night by the Minister of Trade and Industry (Sir Freer).

The Minister said that the oil crisis surcharge was a direct result of greatly increased costs to the oil companies. It was not as high as the companies had thought, he said, according to a Press Association report. “With the world price for oil being subjected to frequent changes by oil-produc-ing nations it is not possible to assess what further adjustments might be necessary,” Mr Freer said. “By delaying any increase, however, the Government has enabled the New Zealand consumer to have the advantage of cheaper fuel for longer than most other nations. Mr Freer said the surcharge now imposed would enable oil companies to recoup some of their costs, but would hold fuel prices at levels substantially below those in other nations reliant on fuel imports. The impact of higher charges on the economy had been fully examined, arid the surcharge varied on diesel and heavy oil to minimise costs on agricultural and industrial production. Mr Freer said that except

I for a reduction of Ic a gallon lin the price of motor spirits last September, because of a (revaluation, retail prices for these products had not been adjusted since June. 1972. In the intervening period ■ the Persian Gulf States, from which most of New Zealand’s crude oil and petroleum products were imported, had imposed several increases in the royalties and taxation levied on crude oil. These increases were customarily passed on into world prices of crude oil and petroleum products. The last two increases, ini October and this month,! trebled the royalties and taxation on crude oil. These two major increases had already affected the cost of supplies to New Zealand. Mr Freer said. The Government had decided that part of the increases should be! passed into prices as an oil I crisis surcharge on petroleuml products. The profit to the retailer from sales of stocks of tnotot spirits and diesel on hand would assist him to finance subsequent purchases at the higher cost. Mr Freer said. This would be taken into account when retailers’ margins were next under consideration. Prices of petroleum were giving cause for concern in

all consuming countries, but there was no alternative at this stage to passing on the surcharge to consumers, Mr Freer said.