CHEAP PETROL

Evening Star, Issue 21621, 17 January 1934, Page 12

CHEAP PETROL

THE RECENT RISE FIXATION LEGISLATION WILL ACTION BE TAKEN ? ■ [Special to the Star.] WELLINGTON, January 17. In. the filial stages of the recent session Parliament adopted priced-fixing legislation relating to petrol which introduced a novel factor into such arrangements. While New Zealand has been familiar with price control, having ns its object the 'prevention of exploitation for 'high profits, this legislation aimed at fixation of the minimum price at which 1 petrol should be sold. It was based upon the report of a select committee to the effect that prices of petrol had been unduly lowered with the object of .eliminating competition against the major oil importing companies. Power was taken under the Motor Spirits (Regulation of Prices) Act to fix by Order in Council the minimum prices for 'the sale of this commodity, having regard to the fair price.in the country of origin. % The administration of the measure is in the hands of the Minister of Industries and Commerce (the Hon. R. Masters), and there is ample statutory power to compel the production' of documents which will enable the fair price to be ascertained, also the costs associated with the distribution of petrol in the dominion.

When the Act was passed petrol was being retailed in Wellington at Is 9d per gallon, a price at which those who petitioned Parliament for price-fixing legislation claimed to be actually below the cost, having regard to distributive expenses and a small profit to petrol resellers. The latter submitted evidence to the Select Committee as to what was considered a “ fair price.” The principal witness for the petitioning company was asked this question by the chairman of the Industries and Commerce Committee. He replied: “It would mean on present-day wholesale costs we are asking you to put-up the price by one penny per gallon only to cover us.” Of the price paid by the motorist for petrol 10.5 d per gallon consists of taxation,, so that the actual price charged for the commodity to-day is very low. There has been a large and steady decline m retail prices for nearly a year, the following being the changes, all reductions:—March 3. 1933, Id; March 15, 2id; May 13, Id; May 22, Id; August 24. Id; October 28, Id. The final reduction was on *' -grade petrol only, but this had the substantial result of making the prices of first and second grades generally the same in most towns: During the Christmas week-end a general price rise of a penny per gallon took place, and this is the position to-day, petrol being Is lOd per gallon in Wellington. RESELLERS’ DIFFICULTIES. With the cutting in petrol prices resellers have suffered in the loss of their margin of profit, and they submitted statements to the Parliamentary Committee suggesting that 3d per gallon was a fair, allowance for them for their services, covering also losses by evaporation. Their position to-day has not improved. and it is understood that they intend, to approach, the Minister of Industries and Commerce on the matter. As for-the wider question of bringing the somewhat revolutionary legislation into operation there is no present, indication of action by the Industries and Commerce Department. The Select Committee was informed that a rise of a penny _ would keep an independent competitive company in being, and that rise lias taken place. The decline in the value of the dollar must assist to keep down importing costs, so that motorists’ enjoyment of the era of cheap petrol should be maintained for some time to come.