PETROL PRICES

New Zealand Herald, Volume LXX, Issue 21468, 17 April 1933, Page 6

PETROL PRICES

KEEN COMPETITION / COMPANIES DENY "WAR" | RATE FOR RUSSIAN OIL The salo of first-grade petrol for Is lOd a gallon at ono .service station in the city during the past few days is a reflection of the extremely keen competition prevailing in the petrol-selling trade in Auckland at present. Many motorists are not a little bewildered at the variety of prices marked up, for since tho last taxation impost was added, it has been necessary to watch tho placards daily to keep in touch jvith the falling movement in prices. The existence of a "petrol war" is denied by representatives of the major oil companies, who state that since they agreed to carry part of the increased taxation and higher exchange rate, the wholesale price of petrol has been definitely fixed. Tho vast majority of the retailers, they state, are selling firstgrade petrol for 2s a gallon and secondgrade for Is lid. Owing, however, to the' scramblo for custom, many of the service stations are quoting Is lid first-grade and Is lOd second-grade to "regular customers." Petrol at id Over Oost Price During the past week one station has been selling first-grade petrol for Is lOd and second-grade for Is 9d. The cut in the price proved so tempting that cars were to be seen lined up in queues waiting to fill up their petrol tanks. It was stated by the representative of ■ one of the oil companies, however, that as first-grade petrol was sold wholesale to the station for Is 9Jd a gallon, the only profit made by the retailer was id a gallon, which would not pay for labour, let alone the other costs of operating the station. An unexpected situation has arisen .with respect to Russian petrol, which has lately been on sale, in the city and throughout the Auckland Province. It was freely stated by motorists that the vendors of this petrol"intended underselling the other first-grade petrols by Id a gallon, and it was on such an understanding that several service station owners, incensed at the prospect, displayed placards outside their pumps labelled, "We do not sell Soviet petrol." At present, however, Russian petrol is being sold at the same price as the other first-grade petrols, namely, 2s a gallon, and the hostile placards have been withdrawn. One vendor, of Russian petrol stated: —" The object of bringing in Russian petrol was to bring down petrol prices in New Zealand; that, in fact, is the reason why so many prominent motorists in the. Dominion took 6haf-es in the distributing company. A week after the/ first supplies were landed the major oil companies brought their prices down by 2d a gallon. The object of the importers of Russian petrol lias thus been achieved and there is therefore no reason why the price sho'uld fall further. Russian petrol will not be sold below the prices charged for other first-grade petrols unless the other companies take that step first. ,We do not want and will not start a price war." Russian Sales Increasing The vendor added that sales of Russian petrol, particularly in the country districts, were steadily increasing. Sales to the public now amounted to 75 per cent of the total quantity of Russian petrol imported, the shareholders in tho distributing company, who were receiving supplies for Is 9sd a gallon, -taking the remaining 25 per cent. Russian petrol has not been introduced into Australia, but considerable quantities of Rumanian petrol are being sold in the Commonwealth. It is understood that the possibility of introducing Rumanian petrol in New Zealand is j already being investigated. The position regarding petrol prices generally is that; taking into account the lOd duty and exchange rate, petrol is being sold to-day cheaper than it has been for many years. When the duty was raised to 8d last October, tb# oil companies agreed to carry the increase of 2d, and the companies have assumed another 2d of the 3d duty imposed last February, making a total of 4d which has not been passed on to the public / out of a total petrol tax of lOd a gallon. "If tvg passed, on the full duty, together with the full amount of the exchange and sales tax, the public would be paying to-day 6d a gallon more for their petrol than they are actually paying," said the representative of one of tho largest companies. "No oil company in New Zealand is making a profit today; we have been obliged to cut the price as we have done to keep our sales up, to keep the motor-cars on the road and generally to protect our huge investments in this country. Otherwise, the drastic taxation and* exchange barrier would have brought the petrol business to a standstill."