FUEL RATIONING PUTS MINISTERS AT ODDS

Press, Volume CXV, Issue 33962, 1 October 1975, Page 1

FUEL RATIONING PUTS MINISTERS AT ODDS

(From

CEDRIC MENTIPLAY)

WELLINGTON, September 30.

Whether there will be rationing of petrol because of the recent decision by O.P.E.C. countries to raise petroleum prices is still the subject of dissension at the highest Government levels.

The Minister of Energy Resources (Mr Freer) has declared himself firmly against rationing. The Prime Minister (Mr Rowling) has given all indications of backing Mr Freer’s view.

The Minister of Finance (Mr Tizard), however, has maintained his stand that rationing must be considered.

When Mr E. S. F. Holland (Nat., Riccarton) moved the adjournment of the House this afternoon to debate the

fuel crisis, Mr Tizard terminated the debate with the words: “Rationing will be the inevitable result if my point of view holds.” The main confrontation will take place when the Cabinet meets again on Monday. It is very likely that both Mr Freer and Mr Tizard will produce papers on the subject for the Cabinet to study. It is quite unlikely that either will modify his views — but it must be remembered that as Prime Minister, and ultimate warden of all portfolios, Mr Rowling will have the final word. No decision In stating his opinion during a press conference last night, Mr Tizard admitted the probability of rationing, but stopped short of branding it as inevitable. He also said that no decision had yet been made. Today Mr Freer said that petrol rationing would be the very last resort. During the debate he said categorically that there would be no rationing. So the two Ministers appear to be directly at loggerheads. Mr Freer has always been against rationing. He says that no ration books were printed two years ago. His reason for being so firm against a reintroduction of rationing on the war-time system is simply that the times have changed. Too many people use cars in their employment to make rationing practicable. Possibilities A system of staggered hours for petrol stations, and limitation of petrol-use for racing, are among more likely possibilities. With Mr Rowling’s support of Mr Freer’s view, it may be said

that rationing seems much further away than Mr Tizard’s statement of last night would have us believe. But, according to a New Zealand Press Association message today, Mr Tizard stuck to his assertion that petrol rationing may be necessary, despite a strong attack on the Government’s management of the oil price issue by the Deputy Leader of the Opposition (Mr Talboys). Mr Taiboys said that the Government had been “caught with its homework undone,” but Mr Tizard retorted that as a result of planning by the Government a sufficient stock of oil was on hand to permit a cushioning within New Zealand of the latest 10 per cent oil price increase. Govt ‘divided’ Mr Taiboys said that the Government had been divided, and had been hoping it would not have to face this problem. “They’re bereft of ideas and lacking in policy,” he said. He said that the conflicting statements by Mr Tizard and Mr Freer proved that the Government had dismissed the problem of a future price increase which would arise after the O.P.E.C. price freeze. They had not planned to deal with a price increase, when everyone knew it would occur.

Devaluation had added ss2m to the price New Zealand would have to pay for its oil and when the 10 per cent O.P.E.C. rise was added the additional cost would be about s9om. “Claptrap” Mr Tizard claimed he had never heard such "political claptrap.” The Cabinet had before it on Monday a paper dealing with the issue which was based on revaluation of the American dollar, devaluation of the New Zealand dollar, and which reflected the cost of overseas purchases in terms of the New Zealand dollar. “We still don’t know the full effect of the 10 per cent rise as it flows through into freight charges. Tanks full “We’ve filled every available storage tank at the old price, and this has given us a cushion to reconsider when we know the position. Mr Tizard said the question to be considered was whether New Zealand should pay as much as it was paying now for oil imports, and receive less oil, or pay more to take in the same quantity. If imports were cut, the internal economy could be adversely affected. ‘The greatest problem I see is holding the cost of oil imports, and this clearly holds the possibility of rationing if we choose to hold imports at the present s3som level.” P.M.’s view

Mr Rowling came out against rationing of petrol today, backing Mr Freer.

Mr Rowling told reporters early this afternoon that he was "mildly surprised” at the comments of Mr Tizard, favouring petrol rationing. Mr Tizard will recommend to the Cabinet that petrol rationing be introduced, and that New Zealand curb its fuel imports to maintain its overseas oil bill at the present rate. “The Government will look at all the other ways to conserve fuel, but I believe it will come back to rationing.” Mr Tizard said that he regarded a decision on stringent conservation moves as urgent. A decision on what action to take could be made in principle by late this week, and announced in detail within three weeks. No prediction However, Mr Freer said that he could only imagine rationing if the situation deteriorated to a shortage of supply rather than a price increase.

Mr Freer would not predict when the price of petrol would rise, and said he did not believe that there would be an increase until fuel imported at the new higher price worked its way through the system. Petrol prices would rise even higher if the Government rationed fuel, the Motor Trade Association said today. 3c increase At least 3c a gallon extra has been forecast as a result of the 10 per cent increase in Crude oil prices at the week-end, but retailers say it could be much more. Mr Freer has agreed to review profit margins in December in the light of petrol sales then. If rationing cut sales, retailers would demand higher profit margins to compensate, the general secretary of the Motor Trade Association (Mr T. S. Hardy) said in Wellington today.