Petrol price monitor plan rejected

Press, 11 October 1988, Page 8

Petrol price monitor plan rejected

PA Wellington The Minister of Energy, Mr Butcher, rejected yesterday a call for a surveillance authority to monitor petrol prices. The president of the Motor Trade Association, Mr Harry Luxford, proposed the authority earlier yesterday at the annual conference of the Motor Trade Association and the Motor-Vehicle Dealers’ Institute. Mr Luxford said deregulation of the oil industry had failed to deliver promised benefits because there was no real competitive discipline in the industry. This lack of competition was because of petrol wholesalers — the four big oil companies — buying petrol outlets and merging the wholesale and retail sectors of the industry.

But in an address to the conference last evening, Mr Butcher denied that deregulation was not working. Formal surveys made for the Ministry of

Energy and the Ministry’s own informal checks had shown price variations beginning to emerge.

Mr Butcher said he was satisfied the Ministry’s price monitoring was providing motorists with up-to-date information about petrol prices.

“There is no need for a special petrol price surveillance authority as proposed at this conference earlier today,” he said. Increased competition would bring further price decreases provided motorists shopped around for petrol.

Further falls could come also from a decrease in taxes on petrol and from recent drops in international oil prices.

The Government had accepted the tax burden on motorists should be reduced.

“I cannot give you any timetable for this reduction. What I can say is that the Government has made a commitment to make changes in this area as debt levels reduce and

the fiscal situation of the Government improves,” Mr Butcher said. The Government would not reintroduce price controls for petrol. With oil companies buying petrol stations, it was in their interest to ensure they sold petrol at competitive prices. The same applied to independent service station owners and proprietors, he said.

“Critics should remember it is still less than six months since the market was deregulated and I think it will be some time yet before its full effects filter through the marketplace.”

Mr Butcher said the Government was considering proposals to replace the present licensing system for motor-vehicle dealers with straightforward registration of dealers. Statutory recognition of dealers and compulsory membership of the Motor-Vehicle Dealers’ Institute would be abolished.