PETROL STOCKS

New Zealand Herald, Volume LXXVII, Issue 23818, 20 November 1940, Page 11

PETROL STOCKS

SOUECES OF SUPPLY THE EXCHANGE PROBLEM STATEMENT BY MINISTER The exchange situation as regards petrol obtained from the Netherlands East Indies, now the main source of supply for New Zealand, is the subject of a statement by the Minister of Supply, the Hon. D. G. Sullivan, received by the Auckland Chamber of Commerce. Mr. Sullivan said the Government was fully aware of the serious effects within New Zealand of the policy of restriction on petrol consumption and would he only too glad to increase the amount available for consumption, if such a course were practicable. The main factor in the situation was the urgent necessity for conserving dollar exchange, continued the Minister. What was not generally appreciated was the effect on dollar exchange of purchases of petrol from countries othur than the United States. It was true that most of the petrol for New Zealand now came from the Netherlands East Indies, but the problem was not quite so simple as would appear from that fact. Agreement With Netherlands Under the financial agreements between the British and Dutch Governments, Mr. Sullivan explained, no transfer problems arose in respect of payments between the sterling area and the Netherlands East Indies during the war, but much- of the petrol was produced by United States companies. These concerns were not, of course, bound by the agreements between the British and the Dutch Governments and they were able to claim dollars in London for sterling paid to them in respect of petrol. Any payments to American companies for petrol purchases in tho Netherlands East Indies must therefore be regarded as dollar payments, except to the extent that the companies might elect to retain sterling or guilders to meet local expenditure. it had to be remembered that the Empire as a whole was almost completely dependent on imported supplies, and sterling area importations as a whole were imposing a very heavy drain on the resources ?>f tho Empire, the Minister said. If New Zealand were to increase petrol importations, the result would be an increase in the total consumption in the sterling area, with consequent further calls on non-sterling exchange resources. New Zealand should look at the matter from this wider aspect and help to keep down the total Empire consumption and therefore the total demand on non-sterling exchange.