The Gisborne Herald. IN WHICH IS INCORPORATED “THE TIMES." GISBORNE, TUESDAY, NOVEMBER 25, 1947. REASONS WHY OIL MEANS DOLLARS

Gisborne Herald, Volume LXXIV, Issue 22494, 25 November 1947, Page 4

The Gisborne Herald. IN WHICH IS INCORPORATED “THE TIMES." GISBORNE, TUESDAY, NOVEMBER 25, 1947. REASONS WHY OIL MEANS DOLLARS

ACCORDING to the acting general manager of a well-known oil company, the only methods of saving dollars in connection with petroleum are, first, to increase production by British companies and restrict the present over-all consumption in the sterling area until that increased production is achieved, and, secondly, to make the greatest possible economy in the use of tankers by employing them in such a way as to achieve short hauls. ‘‘The acute shortage of tankers, British and American,” he added, “is a big factor in the present oil shortage, as is the present serious world shortage of steel for the construction of new refineries, storage tanks and pipelines.” This seems to sum up the position in a nutshell. Among the measures adopted by British and Dominion Governments for dealing with the current economic crisis has been a reduction in the use of home petrol. In this Dominion we are now familiar, or should be familiar, wil h our part in the general conservation plan, and New Zealanders can rest assured that there are many urgent reasons why economy in the use of oil, and particularly of is advisable. Britain herself has found it necessary to draw a distinction between petrol and fuel oil. In .1938 the United States consumed 87 tons of gas and fuel oil to every 100 tons .of petrol, whereas Britain consumed only 37 tons of gas and fuel oil to every 100 tons of petrol. In publishing those figures recently, the financial editor of the Sunday Times commented that this suggested that in 1938 Britain’s use of oil suffered from a certain lack of proportion. To a limited extent, however, it appears that this lack of proportion has since 1938 been improved by the growing home use of fuel oil. About a year ago the British Government called on the railways and other industrial users to substitute oil for coal; more recently the Government reversed its decision and is now refusing to license further installations of oil-burning plant. The reason for this reversal is not so much the need for economy in the use of fuel oil as the shortage of steel, which is preventing the construction of storage tanks. The opinion is that this shortage ought to have been foreseen, but it has no connection with the main need for economy in oil. Nor is there any inconsistency between the development of fuel oil-burning plants and economy in the use of petrol. Next there is the distribution and transport question to which the New Zealand business man has referred. The fact that there is a general Umpire shortage of tankers is beyond all doubt. Britain s own tanker building programme was delayed by the recent fuel crisis, and repairs to existing tankers have also been delayed. Furthermore, the supply of independent tankers is inadequate. All this forces Britain to fall back upon the United States tanker fleet, which is still officially controlled and whose use costs dollars. The general situation is that the United States largely calls the tune and American oil prices have been hardening. From the producer’s point of view the industry is stable. The consumer’s outlook is less assured. He is faced with a seller’s market in which every ton of oil produced can readily be sold. .To the British consumer it is not only a question of how much oil is available. He must also think of his ability to pay for it in currencies acceptable to both the producer and the shipper.