Gas industry wants to be deregulated

Press, 26 December 1987, Page 13

Gas industry wants to be deregulated

PA Wellington The gas industry should be deregulated, said the president of the Gas Industry of New Zealand, Mr Peter Davenport, yesterday. He said he saw no logic in the industry being controlled (including prices) when oil companies had been freed up by the Petroleum Sector Reform Bill which would allow them to buy service stations. The bill also abolishes maximum petrol prices. Mr Davenport said that because of present regulations, skilled staff were tied up responding to controls rather than selling gas against major competitors, electricity and coal. -

The only area which would be directly affected by oil industry deregulation was the alternative fuels market.

Natural gas cost about 60 per cent of petrol, but the hurdle was the cost of

vehicle conversion. Mr Davenport said C.N.G. and L.P.G. sales had fallen off about 20 per cent in volume for several reasons: • The trend to buying cars with a smaller engine. • The Government’s decision to drop the conversion subsidy scheme, since replaced by a not fully used industry scheme. ® A levelling off in petrol prices. Mr Davenport, who is also chief executive of the Natural Gas Corporation, said the hopeful signs for alternative fuels lay in tariff reforms allowing vehicle prices to drop, so encouraging people to buy larger vehicles suited to conversion. Of total gas production, about one-third is used for petrochemical manufacture, one-third for electricity generation and one-third for the reticulated sector.