PRICE OF GAS

Otago Daily Times, Issue 26904, 16 October 1948, Page 6

PRICE OF GAS

INCREASE AUTHORISED

2|d PER 1000 FEET

NO ALTERATION IN MINIMUM CHARGES

Special Correspondent WELLINGTON, Oct 15. Authority to increase the price of gas to consumers by 2£d per 1000 cubic feet has been granted by tbe Price Tribunal to the Dunedin City Council. The tribunal has also authorised the council ,to charge an additional Is 8d a ton for broken coke and 3d a gallon for tarred distillate sold in less

than 44-gallon lots. At the recent public hearing, the council asked for authority to increase the charge for gas by 5d per 1000 cubic feet and to increase the minimum charge from 18s per annum to 3s a month or 36s a year. The tribunal has refused to agree to a rise of more than 2ad and has rejected altogether the council’s proposal to increase the minimum charges. Sound Financial Position

The tribunal, in giving its decision, said: “There is no doubt that over a period of many years the operations of the Gas Department have been highly successful, and that its financial position is very sound. It was stated at the hearing that even if the whole of the increases were approved the price of gas at Dunedin would be the lowest in New Zealand. The tribunal, however, after considering the submissions of the City Council and the price control division, is clearly of opinion that the total increases proposed cannot be approved in view of necessity of avoiding unwarranted increases in the cost of living. “ It has to be remembered, also, that this is not a matter which concerns the citizens of Dunedin only, who may look for reductions in rates to follow the successful operation of the city’s trading enterprises, as the inhabitants of two neighbouring boroughs are also supplied with gas by the department. In the opinion of the tribunal, the increase it has decided to authorise will enable the City Council to continue its policy of making ample provision for the redemption of loans, renewals, and to meet the increased costs, and should show a small profit.” Examining the Gas Departments finances in detail, the tribunal said that from information supplied by the Price Control Division it appeared that the total sales of gas and residuals rose from £103,863 in 1939 to £129,797 in 1948. Over the same period the total working expenses relating to gas and residuals rose from £68,857 to £102,481 The net surplus fell from £9369 to £3854, and liquid and floating assets rose from £207,898 to £331,549. Over the same period, 1939 to 1948, the difference between liquid and floating assets and outside liabilities improved from a . deficit of £27,229 to a credit of £165,624. Included in the liquid and floating assets were two funds—the Renewal Fund Investment and Renewal Fund Commissioners totalling £227,000. These funds had been created to-pro-vide for replacement of depreciable assets of the works. The total fixed assets as at March 31, 1948, shown at cost price, amounted to £481,632. The Price Control Division, however, submitted, and the tribunal agreed, that the sum of £4OO contributed to the Otago Centennial Council and the sum of £SOO, part of the cost of equipment supplied to''the Municipal Chambers, should be added to that amount, making a total profit for the year ended March 31, 1948, of £4754. This figure, however, showed a marked decline cjn the previous year's net profit of £11,994. Estimates Challenged

The department submitted an estimate of increased costs for the current financial year at £10,750. The Price Control Division submitted that £10,750 was an over-estimate,' and that the correct figure was £9IOO. If the division’s estimates of increased costs were correct, the claim of the department should be reduced to £9IOO. After considering the submissions of the Price* Control Division and the council, the tribunal was of the opinion that a fair estimate of the increased costs amounts to £9475, made up as follows:—lncreased cost of coal and freight resulting from increases applied in October, 1947, £6000; increased cost of salaries and wages resulting from increases applied in October, 1947, £1000; increased cost of coal from April 1, 1948, £ 1500; revocation of Modification of Factories Act, £750; engine drivers’ award, £175; mechanics and meter repairers’ award,. £550; —£9975, less stores recovery, £SOO; —£9475. After off-setting the adjusted net surplus of £4754 against the estimated increases in cost, £9475, a deficit, of £4721 would result, but it was agreed at the. hearing- that there would be a further saving of approximately, £9OO per annum on interest ’charges payable on London-Held debentures. This saving must also be effected against the deficit of £4721, leaving an actual deficit ojE £3821.