PETROL PRICES

Evening Post, Volume CXVIII, Issue 33, 8 August 1934, Page 14

PETROL PRICES

AUSTRALIAN "WAR"

RECORD LOW LEVELS

(From "The Post's" Representative.) SYDNEY, July 30.

The big petrol companies in Australia are now engaged in ono of the most ro- ' maskable commercial wars in the history of tho Commonwealth, and while the motorist is enjoying tho spectacle he is wondering how long it can last. During the past week petrol prices throughout Australia have reached a record low level, and if statements that are issued by tho companies from time to time are to be believed, the new prices are not economically sound. Last week high-grade petrols/ that during tho previous week cost Is 7d a gallon, have been available at Is 'Id, with every prospect of a reduction in the near future to Is, or even lower. Eighteen months ago tho same petrol cost 2s 3d. With tho entry into the market of an independent company prices gradually receded until they became more or loss stabilised, at Is 7d, tho independent company refusing to go below Is b"d. That was a mere skirmish compared to the present war. A few months ago ono of the major companies introduced a petrol containing ethyl—a leaded petrol which has found favour in other parts of the world because of the special qualities that have been attributed, to it. Tho other big companies were already marketing two grades of petrol, and when they decided to introduce the "loaded" petrol, their idea was still to market only two grades. Ono competitor, however, insisted upon having three grades; hence the war. Conferences were held early last week with tho idea of reaching a settlement which would involve a stabilisation of petrol prices, but agreement was impossible, and since then one company has followed another in announcing reductions in price. The -introduction of three grades of petrol by all tho companies now engaged in the Australian market would mean a groat increase in tho capital cost of the distributing plant, already abnormally high. At most of tho'v garages it would mean the addition of at least three more petrol pumps, and the companies say that i,t would be unwise and uneconomical to put the proprietors to such a- big expense, especially as the cost would eventually fall back on the users of petrol when prices were again stabilised at a reasonable figure. It is of importance to note that the tax on all petrol is 7d a gallon, so

it will bo seen that with the price at Is 4d there is little left for tho- distributors and for the retailers. In the circumstances it is not reasonable to suppose that low prices will rule for very long, unless it is to bo a fight to tho finish, with a survival of the strongest.

It is claimed that never before has any industry in Australia been thrown into such confusion as the oil industry finds itself at the present time. The motorist does not know until ho arrives at a filling station what price he wiH have- to pay for his usual fuel. Great price discs bewilder, him, and ho finds it hard to decide whether to fill up with the petrol he has been accustomed to using—at, say, Is 4d—or take advant:igfl of a cheaper petrol at Is 3d. Whatever his decision in this direction he usually ends up with purchasing only sufficient to take him over till the morrow, when he is certain there will be further reductions. The whole business is so ridiculous that it cannot last, and it remains to be seen which side will give in. . ■ Strange to say, the iiidopoiuleiit'i'-oiu-pany which forced prices down some time ago has refused to enter the present war, and is still selling its particular brand of petrol at Is (id. It has insisted that a lower price than Is (id is uneconomical, and has advertised accordingly. Advertising during the war has reached largo dimensions, the Press and the radio being used to the fullest extent possible.