Petrol price may rise again in two months

Press, 28 March 1980, Page 1

Petrol price may rise again in two months

Energy, reporter

Another petrol price rise may be announced in May to cover increased retail margins and to reduce consumption. An increase of up to 5c a litre is possible, which would take the price of petrol to 53c a litre ($2.41 a gallon). How ; much deeper motorists will have to dig into their pockets will depend on what constraints the Government wants to put on petrol use and on whether oil companies and garages get a bigger slice of the cake through increased margins.

The Government is expected to decide soon on what conservation measures it considers necessary including the continuation of the carless-days scheme.

Port stocks of petrol at present are bigger than usual to meet a shortfall in petrol production while the Marsden Point oil refinery is overhauled at Easter and rationing has therefore been ruled out as unnecessary'.

If the Government decides that further conservation is required, a big increase in the price of petrol could be used to curtail consumption. A price rise is not' likely to be imposed until May at the earliest, mainly to avoid a sudden jump in the consumers price index and the already high rate of inflation. The index is measured quarterly and a petrol price rise of 5c a litre, or more than 11 per cent, in February, will affect the first quarter of this year. A price rise in May would coincide with the next scheduled , meeting of oil Ministers of the Organisation of Petroleum Exporting Countries which will give the Government an indication, of how oil prices are likely to move in the next three or four months. Oil prices are not expected to move much at the O.P.E.C. meeting and some Ministers have predicted that prices may even drop, although, this is more likely to happen later this year.-

The oil companies are negotiating with the Government now for increased margins but they have not formally presented their case yet. They will probably do so before Easter, while petrol retailers will push their . case for increased margins after April 14 when a survey of garages is expected to be completed. The survey is examining the liquidity problems of members of the Motor Trade Association.

Petrol is now more than 50 per cent dearer than it was a year ago while wages have risen by an average of about 15 per cent in the same period. Last March it could have been argued that motorists paid about the same proportion of their wages on petrol as they did in 1967, when petrol was regarded as a cheap commodity. The same argument does not apply now and a futher rise in the price of petrol will take an even bigger bite out of the pay packet.