Gas price up for industry — calls for better supply

Press, 22 June 1978, Page 1

Gas price up for industry — calls for better supply

The Christchurch Gas, Coal, and Coke Company, Ltd, has raised the price of gas to industrial and commercial consumers by at least 10 per cent.

Although the domestic rate remains the same. Christchurch industrial and commercial consumers will pay more than double the amount charged to their Auckland counterparts. According to charges approved this week by the Ministry of Energy and Department of Trade and Industry, the rates for commercial water heating and space heating will rise by about 18 per cent to $5.10 net per 1000 cu. ft and $5.70 net per 1000 cu. ft respectively. Other rates for the supply of industrial and commercial gas are based on a graduated scale, but are up by about 10 per cent, according to the secretary of the gas company (Mr L. S. Watson). News of the price increases came only a day after the chairman’s report indicated that the company might have to consider winding up unless the Government guaranteed future feedstocks. The chairman (Mr H. W. Revell) said the company’s trading loss last year was $153,000, and that a further loss this year was unavoidable. despite increased tariffs. Christchurch manufacturers will now pay rates two and a half times higher than Auckland manufacturers, according to Dr N. J. Peet, a senior lecturer in chemical engineering at the University of Canterbury. The increased tariffs again highlighted the need for a definite Government policy on energy for tne South Island, said the director of the Canterbury Manufacturers’ Association (Mr I. D. Howell). South Island manufacturers competing on the national market were disadvantaged by the greater production costs, said Mr Howell.

He agreed with a suggestion that many Christchurch companies would

soon replace gas with oil or electricity as their energy source, but said many production plants relied exclusively on gas as a clean-burning source of energy. If the supply of gas was stopped many factories would be forced to move to the North Island, Mr Howell said. The Runanga State Miner’s Union is also worried about the gas supply. The president of the union (Mr N. R. Tvrdeic) said the next meeting of the union executive would discuss it. The Liverpool State mine was the main supplier of high grade gas-making coal to the South Island, and the Christchurch works was the main customer, said Mr Tvrdeic. The works took also a large quantity of Strongman coal, which was blended with Liverpool. “The future of the Christchurch gas works is important to the State mines, and to the economy of the West Coast in general,” he said. Last month Mr Tvrdeic said a lack of foresight on the part of the Mines Department had meant that not enough Liverpool coal was produced to satisfy demand.

Cedric Mentiplay reports from Wellington that an interim report on the

plight of the Christchurch Gas, Coal, and Coke Company is in the hands of the Minister of Energy (Mr Gair). A full report is being prepared by the Secretary for Energy (Mr W. Duncan). Mr Gair is in Auckland, recuperating from surgery, but he has already studied Mr Duncan’s preliminary report. “Answers to the problems of maintaining a reliable gas supply for Christchurch cannot be provided immediately but the matter is under investigation and I will be following up inquiries as soon as I return to Wellington,” Mr Gair said yesterday. “The availability of L.P.G. as a feedstock for the South Island manufactured gas industry will finally be determined once the Government has studied the results of a feasibility study due for completion within the next two to three months by Maui Development, Ltd,” he said.

In the meantime the measures announced in the Budget, including a temporary freight subsidy on L.P.G. and a grant of 25 per cent of qualifying expenditure on the purchase of L.P.G. storage vessels and gas-reforming plant, would encourage development to proceed.