Unfair Advantage For New Oil Firm

Northern Advocate, 21 July 1949, Page 6

Unfair Advantage For New Oil Firm

Opposition Alleges , . .

WELLINGTON, Thu. (P.A.) .-Strong criticism of the Government’s action in making steel and cement availabh for the construction of large storagi tanks at Auckland for the British Petroleum Company of New Zealand Ltd, was expressed by Oppositio speakers in the House of Represcn atives yesterday. The Government, which owns 51 per ceiit of the capital in the company was also accused of giving this company unfair advantages in the sale of Petroleum products. Tenders were not called for tire supply of aviation spirit to the RNZAF because it was known no suppliers ether than the British Petroleum Company had modern storage facilities in New Zealand designed to ensure the most economical storage of this spirit, said the Minister of Works (Mr Semple) in reply to a question by Mr T. L. Macdonald (O—Wallace). PRICES NOT HIGHER The Minister said contracts for supply to the National Airways Corporation were arranged by the corporation.

Tlie prices in this case were not igher than those paid under previous ■ontracts.

Mr Macdonald's question was based on a recent report that all aviation spirit was to be purchased from the Government-controlled British Petroleum Company, and that former conI,,uh oil companies had not been renewed.

'n reoly to Mr S. W. Smith (O Hobson) Mr Semple said the Raihva* Department had entered into a very favourable contract with the British Petroleum Company for the supply of fuel oil. Tenders were not called, but it was not the policy to disclose particulars of such contracts. Mr J. R. Hanan (O—lnvercargill’' said tire Government was trying to bluff the country that this company, in which the Government itself had a half interest, had better storage facilities Cor aviation spirit, but that was not so. “POLITICAL SCANDAL” Mr C. M. Bowden (O—Karori) said the matter was little short of a political scandal. • The Government's action was divorced from commercial morality: it was giving this concern unfair advantages over competitors, establishing exclusive markets for it, and encouraging petrol vendors to seek licences for the company’s pumps when they had been refused licences to sell the product of older companies

Mr Bowden said he understood 8000 tons of steel was made available to the British Petroleum Company to build a special type of storage tank in Auckland when other firms could get neither steel nor labour for such work.

Moreover, the Naval Board’s report said the Navy had allowed its tanks to be used by the company for storage.

Mr McCombs. Minister of Education, said this comoany was a subsidiary of (he amrlo-Irnnnn Oh Comnan” which was established by Mr Winston Churchill with a large amount of British Government caoital to ensure fuel supplies for the Navy. NORMAL PRACTICE The New Zealand Government was following the normal practice in buying aviation spirit from this company. It would not be suggested that the Government would send returned servicemen seeking loans to private finance institutions, and the Govern-n-’pnt natural!” v>r>unht fuel from th° company in which it held an interest Mr W. A. Sheat (O—Patea) said he was surprised that the Minister/of Education had deliberately avoided discussing one of the main charges—the preferential treatment for the company in the use of steel and cement, which were materials in very short supoly. The Minister had an obligation to denv that Differential treatment was being given, or to iostify the diversio" of those materials. Ministers and the Government would have something to answer for at the elections in view of the fact that they had denied every private citizen the right to use those materials. TANKS NOT FULL Mr J. T. Watts (O—St Albans) said the existing oil tanks of the privatelyowned companies were not full and had not been full for some time. The diversion of steel and cement for the construction of oil tanks for the Government company when there was such great need for additional schools and public and other buildings was nothing short of a political scandal.