Petrol deregulation worries trade

Press, 8 May 1985, Page 8

Petrol deregulation worries trade

By

OLIVER RIDDELL

in Wellington Growing concern is evident among members of the Motor Trade Association about Government investigations into delicensing petrol and dismantling price controls. Delicensing the petrol industry would effectively pass control of the industry into the hands of the multinational oil companies, said the association’s executive director, Mr Max Barclay. The association has produced its own report on the

issue, “The Case for Retention of Existing Motor Spirits Licensing and Price Controls,” which it launched in Wellington yesterday. Its report emphasised the continued need for controls, Mr Barclay said. It drew on the findings of the 1974 Commission of Inquiry into the Distribution of Motor Spirits and Ancillary Products. This 1974 commission had carried out the most extensive investigation into the petrol industry in New Zealand.

The association’s report claimed that removal of controls would threaten the livelihood of independent retailers and their employees and lead inevitably to a reduction in outlets and the disappearance of the traditional services offered by petrol stations. He said a further and inevitable result of removing controls would be to destroy the stability of the petrol market.

It would lead to a return to the system of pricing differentials, meaning

higher prices for motorists in areas remote from the main ports and the likelihood of a “price war” which would undermine the Government’s efforts to reduce petrol consumption. Mr Barclay said that while some motorists might benefit from lower prices in the short term, the nation’s fuel bill over all would rise and the Government’s alternative fuels programme would be affected adversely by any petrol price war. Summing up its findings,

the report said that the impact of petrol was too important for the New Zealand economy and the motoring public to be “subject to the whim of overseas-owned wholesalers.” While the association accepted the Government’s general aim of reducing its intervention in and control of the market place, it believed that the vital nature of the petrol market to every sector of the economy made continued Government involvement essential.