Equal tariffs sought for petroleum gas

Press, 23 February 1978, Page 2

Equal tariffs sought for petroleum gas

The executive of the South Island Local Bodies’ Association has agreed to send a letter to the Minister of Energy Resources (Mr Gair) I urging that liquefied petroleum gas be made available to the South Island at the same price as it will be avail-1 able to North Island users, i Members argued that if the North Island was to receive electric power genera-! ted in the South Island at: the same price as here, then the price structure for L.P.G.! should be the same. In response to letters from the association the! Minister had said that Maui! natural gas would probably not be piped to the South Island “for economic reasons.” He added, however, that "it is increasingly likely that Maui liquefied petroleum gas can be shipped economically to at least the main South Island centres and railed on from there. The Government is now negotiating with Maui Development, Ltd, over the appropriate course of action. The basis for pricing this L.P.G. is still being considered.

“In the meantime,” Mr Gair said, “the Secretary of Trade and Industry', who has responsibility for the pricing of L.P.G. has decided that Kapuni L.P.G. shoulld not be priced on a national or main ports basis because of the relatively limited availability! of Kapuni L.P.G. and the! substantial extra transport) costs applying to South Island deliveries. If costs be-j tween the two islands were averaged there would be a significant increase in prices for the North Island, a lessening in market growth there for the wrong reasons and the possibility of a disturbed supply pattern.” On electricity tariffs, Mr Gair said that part of the! problem was the great varia-j tion at the retail level from) one supply authority area to I the next, arising partly! through the differences in electricity load. “The Government will continue to encourage the amalgamation or co-opera-1

tion of authorities to achieve a better load distribution,” he said.

That comment prompted the Mayor of Christchurch (Mr H. G. Hay) to note “it sounds like we might expect some sort of a power board take-over.”

The association had pre-; viously w'ritten to electricity! supply authorities and other agencies seeking their sup-, port in backing a differential electricity tariff between the North Island and the South Island. Support was obtained from the Waitaki ElectricPower Board, the North Canterbury Electric-Power Board and the Canterbury' Manufacturers’ Association.

The Southland Progress League and the West Coast Electric-power Board, however, declined to support a differential tariff scheme. The engineer-manager of the West Coast board (Mr R. C. Western) told the association that if it were not for I the North Island’s absorbing surplus power generated in the South Island, the cost of hydro generation here would be higher. He also added that, in his opinion, a lower bulk tariff in the South Island would not attract any more industry. “The fact is,” he said, “that the price of electricity is one of the least of the factors taken into account when a factory site is chosen.”

The Minister of Transport (Mr McLachlan) had replied to a query from the association on inter-island shipping services advising that the Government subsidy on the Coastal Ranger for 6| months in 1976-77 had been $916,000 and the figure for the full 1977/78 year was expected to reach $1,909,000. “These amounts include’both the operating loss on the service and a reasonable return on the capital employed by the Shipping Corporation,” he said. Members of the association expressed the view that the deterioration of shipping services between the islands had long been predicted.