PETROL PRODUCTION

Evening Post, Volume CXVII, Issue 111, 12 May 1934, Page 21

PETROL PRODUCTION

UNDER PROTECTION

PRICE AND PROFIT PEGGED

Prophecies of world famine in mineral oil, in forest products, and even in wheat received much attention only a few years ago. Today tho scene is changed. Whoat is at a glut just about the timo when the prophet expected

starvation,

The mineral oil situation has altered. The minoral product has cheapened. Wood alcohol is knocking at th© door, but is subsidised ob protected^ Hydrogenation of coal, also protected by tho British Government, is being tried on a big scale at Billington-on-Tees. Coal interests in New Zealand are watching.

Oil-bearing shale deposits have been worked from time to time both in Australia and New Zealand. In this ago of over-production (or under-eonsump-tion) Australia yet comes forward with a big new scheme for working Nownos shale—a £600,000 scheme, with a 6,000,000 gallons annual production. The Newnes Investigation Committee recommends 600,000 &X shares, half of them to be subscribed by the Commonwealth and the State Governments, the other half to lie 6 .per cent, cumulative participating preference shares to bo subscribed by the public. Voting power is to be equal—one share, one vote.

Australian-produced petrol would, of course, have* to bo protected. According to tho committee, tho present protection against imported petrol must stand, and the Australian-produced petrol must be untaxed for several years.' After about four years, Aus-

tialiaii-produeed petrol should bo so] strongly established that it should be j able to pay the Government an excise duty of, say, 2d a gallon, to recoup the Government for loss of duty on the petrol produced during the first four years. Thfe exact amount of oxcise duty could he fixed by a tribunal so as to "ensure a return of 7 per cent, on capital, allowing 6 per cent.-for dividend and 1 per cent, for Reserves. '-' The question arises: Can tHere be any stability in the factors of profit ana price when these are dependent on protective levies that a future parliament

(under the pressure of economic considerations now. unforeseen) may alter? Is stability for such adjustments buy-able-only at the price of each country becoming self-sufficient in .motor spirit?