Petrol rise expected

Press, Volume CXV, Issue 33739, 11 January 1975, Page 1

Petrol rise expected

(By

TREVOR HENRY

N.Z.P.A. political correspondent.)

WELLINGTON, January 10. Motorists will probably pay about three or four cents a gallon more for petrol within the next month or two if the Government accepts an application by the oil industry for a price increase.

But if the Government takes the opportunity to alter the fuel-tax rate or subsidise the road transport industry, the increase might be a lot higher, perhaps as much as 20c a gallon.

Oil company sources indicated today that motorists were unlikely to experience the big increases of the last 18 months when petrol rose twice —by 11c and then 10c —to 69c a gallon for highoctane fuel. OCTOBER APPLICATION The oil companies applied to the Department of Trade and Industry in October for a price increase, and revised their figures in November after an increase in Middle East oil royalties. They were hoping for a price rise before Christmas to compensate for increased costs, but the Minister of Trade and Industry (Mr Freer) made it clear they would have to wait until after the summer holidays. The companies are expecting a decision soon, but it is believed that the Department of Trade and Industry has yet to make any recommendation to Mr Freer. When it does, he will take the question to Cabinet, so that a decision is still weeks away. The department might ask for a further meeting with the companies to try to reach agreement on the figures that

form the basis for the application. TRANSPORT COSTS The Prime Minister (Mr Rowling) and other Ministers have already made it clear that there will be a price increase, and that something will be done to cushion the blow for the road transport industry. Mr Rowling has talked of stabilising the cost of diesel, but the Government will also have to do something in the

way of a subsidy for carpiers using petrol. The cost of this will have to be found either from taxes or by charging the private motorist even more for his gallon of petrol. Mr Rowling said recently that the private motorist was an extravagant user of petrol. Charging him a much higher price for petrol would, it is hoped, persuade him to use less, and this should reduce or stabilise the amount of overseas funds being used for fuel.