PETROL PRICES.

Evening Star, Issue 21633, 31 January 1934, Page 12

PETROL PRICES.

TO THJt EDITOR. Sir, —In your issue of January 23 you published an abbreviated statement of one of the major companies arising from the report of the Industries and Commerce Committee on the petition of our company. Some of those statements cannot be permitted to go unchallenged. The major company in question admits the impossibility of proving that their former rates for motor spirit were reasonable, but goes on to affirm that “ New Zealand has always been an open market for competition which has been sufficiently vigorous to keep the price structure of spirit healthy.” About the only thing which has been healthy in the past has been the profit made by the overseas oil companies engaged in this trade. The Dutch and English companies which control the operations of the company in question have between 1910 and 1930 shown profits ranging between 17i per cent, and 49 per cent, per annum. During the war years their average profits were over 40 per cent, per annum, and, in addition, in 1917 a bonus of 60 per cent, was paid to shareholders. Investigation of the position before the Associated Motorists Petrol Co. Ltd. commenced operations shows that the New Zealand motorist made a very handsome contribution to those •profits. .In 1933 the Government requested the overseas oil companies to reduce the price of petrol by one penny per gallon, which request was refused. At that date the difference between landed cost and the wholesale selling price gave the overseas oil companies a gross profit of approximately 9Jd per gallon. Notwithstanding this refusal to the Government, in the following month, when our company commenced operations, the overseas oil companies immediately commenced progressive reductions in price. And by December they had reduced the gross profit of 9Jd per gallon to IRI per gallon. All these reductions were initiated by the overseas companies, as the dates will show, and it is obvious to us that the intention was to eliminate inconvenient, . independent competition. Our company came into being because of the dissatisfaction which existed in New Zealand regarding the price of petrol. By our successful entry into the market we have proven that petrol could lie sold at lower rates than charged by the overseas companies. The price war instituted by the overseas companies was for the purpose of eliminating our independent competition. We do not claim to be able to sell petrol at uneconomic rates, but it is the policy and fixed purpose of the company to market its products to the motorist of New Zealand at a price which will be fair to the consumer.— Yours faithfully, Associated Motoiusts Petkol Co. Ltd. Charles Todd, Chairman of Directors. January 27.