L.P.G. priced off domestic market M.P.

Press, 7 August 1981, Page 18

L.P.G. priced off domestic market M.P.

Parliamentary reporter

The recent price increase of 73 per cent for liquefied petroleum gas would earn Liquigas $35 million a year on annual sales of 100.000 tonnes, but the total cost of its national distribution network would be only $6O million. Parliament has been told.

In a debate on notices of motion. the Opposition spokesman on energy, Mr R. J. Tizard, said that L.P.G. retail outlets owned by taxi companies were being forced into severe liquidity problems by the lifting of price control' from L.P.G. last month.

Prices had risen from 18.75 c a wholesale litre to 32.4 c, he said.

L.P.G. selling-stations set up by taxi companies with their own capital were losing money because they were having to compete with Liquigas wholesale operators. Taxi operators found it cost more for an equivalent measure of L.P.G. than petrol over shorter running distances.

Taxi-owned L.P.G. sellingstations could not function on their permitted margin, let alone compete with wholesale companies set up by Liquigas. A domestic fuel source was being priced off the domestic market, he said. A Labour government would guarantee a differential between petrol and L.P.G. Mr Tizard said that big numbers of taxi fleets had converted to L.P.G.: 129 cars in a Wellington fleet of 145. 46 in a Palmerston North fleet of 56, and 42 of a Porirua fleet of 50.

Mr S. J. Rodger (Lab., Dunedin North) said that L.P.G. was a logical fuel for the South Island but in typical fashion the Government was making sure the South Island got no concession. It had raised the price of L.P.G. by 73 per cent: closed gasworks in Greymouth and Oamaru: would close the Christchurch Gasworks next year; and would not grant an electricity price concession to domestic users in the South Island even though electricity was 2% times cheaper to produce in the South Island than in the North. Also, the average

Auckland household used 6400 units a year. Christchurch. 7700. and Dunedin, 9063.

Mr J. J. Terris (Lab., Western Hutt) said the price rise was a serious breach of faith with the consumer, who had believed a clear savings margin would exist on petrol.

The Under-Secretary for Energy (Mr Brill) said Opposition members were woefully ignorant. The Government had not put the price up. Abuse of the lifting of price controls was being monitored by statutory authorities; prices of NewZealand fuels were not on par with world prices —

L.P.G. was far below the world price — and Liquigas could not cover the cost of establishing its distribution network at a lower price.

If L.P.G. was to be available in the South Island at all, its price had to rise to finance its distribution. The North Island had to pay.

L.P.G. would always be substantially cheaper' than petrol. Mr Brill said.