PETROL PRICES REDUCED

Hawera Star, Volume LIII, 26 August 1933, Page 12

PETROL PRICES REDUCED

WORLD-WIDE EFFECT OVER-PRODUCTION MAIN CAUSE. MARKETING AGREEMENT BREAKS DOWN. The reduction in the prices of petrol is, acording to a recent report by Mr. H. B. James in the “Brisbane Courier,” worlcl-wide, over-production of oil, followed by a break-down in the efforts to pro'rate output from the big fields in North and South America, Sumatra and Rumania. An oil “League of Nations,” known as the World’s Oil Conference, has for the last two years been making desperate efforts to stabilise production with a view to keeping the oil industry on a profitable basis, writes Mr. James. Last year the oil league at the Paris conference succeeded m patching up the bitter petrol price war oy parcelling out the world into territories and striving to- maintain pi ices by allotting quotas. That international marketing agreement has now apparently broken down aiid the oil vai is ou again . Since 1930 the exports of refined oil products from U.S.A. have declined 3-12,000,000 gallons, or 17 per cent, of the total, the trade having gone to outside competitors. While America is still ahead of all other suppliers ol petrol, she is losing her position, and the Dutch West Indies, Persia and Rumania are creeping up. In 1932 U.S.A. had 29.2 per cent, of the world s motor spirit trade, the Dutch '' est Indies being next with 17.9 per cent. It appears that there are two factors responsible for the cut-throat competition—Rumania and the independent producers outside the major oil rrroup in America. Rumania does not wish to wreck the conference’s stabilisation sdlieme, but- as oil is that country’s major export and tlie chief support of her budget and currency, she cannot afford to restrict production beyond a certain point without national bankruptcy. Her quota has been encroached upon by independent producers outside the control of the oil league. „ . , Efforts to protect Rumania s markets failed, and that country’s oil magnates restarted full production, and last year flooded the world’s markets with 'an excess supply of many millions of tons of oil. Coupled with tins is the fact that some of the minor oil companies in America have been wrecked financially, and their wells and plants bought up at a tenth of thenvalue. This has enabled some of the independents (without the vast over-1 head burden of their predecessors) to. sell at lower prices than the major j corporations with tlieir huge _ capitals, | organisations, and public service faciliThese are two of the chief causes j of the renewal of the world-wule oil war. |