Ration plans coming in case petrol supplies slump

Press, 16 June 1979, Page 1

Ration plans coming in case petrol supplies slump

PA Wellington Contingency plans for the introduction of petrol rationing were being drawn up, said the Minister of Energy (Mr Birch) yesterday.

However, such plans would be put into effect only if there is a substantial petrol shortage of more than 10 per cent. Mr Birch said that the Government’s plan was that earless days would be introduced if necessary, and if the shortage continued rationing was possible. Oil supplies were about 5 per cent short of requirements at present. The critical level of shortage in New Zealand would be slightly more than 10 per cent, he said. However, Mr Birch could not say how long a rationing scheme would take to introduce once the decision had been taken. “It depends at what point we introduce it,” he said. “I have asked the Ministry to make contingency plans in case rationing is necessary. We are not printing coupons, but we want to know the position on rationing. “If Saudi Arabian supplies are cut we would

lose 20 per cent of our oil. Carless days would not cover that so heavier measures would be called for,” Mr Birch said. It might cost the Government about SISM a year to administer rationing, but this was a conservative figure, he said. Mr Birch later urged New Zealanders to redouble their efforts to save fuel. “It is unlikely that our supplies of imported fuel will improve quickly,” he said. Mr Birch said that New Zealand had to cope with eight significant disturbances in the international oil market. They included: political instability in the Middle East; high “spot” prices on the open market; panic buying for stockpiling; the United States’ $5 a barrel subsidy scheme for diesel; oil supply running at 5 per cent less than expected 1979 demand; price leap-frogging among O.P.E.C. producing countries; insufficient success in reducing world demand for oil; and careful

regulation of producing wells in the O.P.E.C. countries. The Government last asked New Zealanders for voluntary savings in March. “We asked industry to save 5 per cent, transport 7 per cent, and motorists 10 per cent,” Mr Birch said. Some users had made determined efforts, but others were “dragging the chain,” he said. “We particularly need voluntary restraint now, rather than the stockpiling which occurred earlier in the year.” New Zealand had not bought oil on the “spot” market because of the balance-of-payments deficit, Mr Birch said. It would be irresponsible to do so unless it was essential as a means of protecting jobs, production, and exports. “The international scene is fragile. Oil supply was not matching demand, and the price explosion mustbe brought under control,” Mr Birch said.