Increase sought in petrol margin

Press, 28 February 1980, Page 3

Increase sought in petrol margin

PA Wellington The Motor Trade Association would lodge an application for an increase in the petrol sales profit margin immediately, said its executive director (Mr Trevor Bates)’ yesterday. This was part of a “threepronged attack” on the liquidity problems about which petrol station proprietors are complaining, he said. The association would also talk with the Ministry of Energy on the liquidity problem, and the association’s service station committee would meet on March 12 and 13 to consider further action. The association met the Minister of Energy (Mr Birch) on Tuesday to put its

case for an increase in profit margin. Mr Bates said the industry was suffering increased costs and restricted credit, meaning that service station proprietors were having difficulties in meeting operating costs. Mr Bates said the Minister told them he was not prepared to reconsider the last application, of November, for an increase in the profit margin. Mr Bates said although the gross profit margin had increased from 1.19 c per litre to 3.31 c per litre since 1973, this was a real decrease from 11.6 per cent to 6.9 per cent. Also, the proprietors now had to pay for their petrol before they could get more, meaning some were oper-

ating on only three days’ credit.

A spokeswoman for Mobil Oil said yesterday that the new credit policy was necessary because limited credit was available from the oil companies’ overseas suppliers. Mr Bates said the Government’s stand was to consider adjustments to the profit margin only after costs had been incurred by the proprietors. Mr Birch said on Tuesday that he was not prepared to anticipate the costs proprietors faced. Mr Bates said any further action by the association, such as restricting the hours of petrol sales, would be discussed at the March 12 meeting.