No quick decision on petrol margin – Minister

Press, 11 October 1979, Page 3

No quick decision on petrol margin - Minister

Wellington I. Threats of direct action by * tle motor trade industry will fiot force the .Minister of Energy (Mr Birch) to make a fluick decision on motor spirit retail margins. », “I will not be coerced by ine retailers,” Mr Birch said last evening when asked to comment on a resolution of the Motor Trade Association at its annual conference at — to take direct action if a decision is not announced by November 1. . Mr Birch said he appreciated the situation faced by retailers, but they had already been granted two increases this year. Those increases totalled 23 per cent. Mr Birch declined to say y hen he would announce a

decision on the association’s application for a .32c a litre increase in the margin. “Any indication on my part would lead to price speculation,” he said. Mr Birch said the association had not told him what action it planned if a decision was not made soon. "They are a responsible I body and I would expect them to act responsibly,” Mr Birch said. “They have not given me an ultimatum.” The new executive director of the Motor Trade Association (Mr T. Bates) said yesterday the association had made two applications to the, Ministry of Trade and Industry, which would provide ifor an increase of .32c per

; I litre. The first was made in July. He would not comment on : numbers voting for and ’ against the resolution passed at the conference on Moni day or what action was proposed. The outgoing president of the Motor trade Association. [Mr P. McD. Milne, of Rich- ‘ mond. said the ability of the iservice station proprietors to ' meet the challenge of change (was dependent on a change I of attitude by the Government to the retailers’ margin | on motor spirit. ' In an address to conference delegates, he said: “As ■the price of petrol has increased. the retailers’ mar- ; gin has been eroded, and ■ (this, coupled with declining

or static sales volumes, increasing capital requirements for higher priced stocks, plus reductions of credit facilities Trom wholesalers, has placed and will continue to place many service stations in an extremely serious financial i situation.”

Mr Milne said retailers’ Igross profit margin expressed as a percentage of price had 'dropped from 10 per cent in : December, 1971, to 7.6 per <ent in August, 1979.