PETROL PRICES.

Otago Witness, Issue 3886, 4 September 1928, Page 69

PETROL PRICES.

“ That the Government be requested to institute a Board of Trade inquiry in order to determine whether or not the petrol companies operating on the New Zealand market are obtaining more than a fair and reasonable rate of commercial profit ” was a motion moved by Mr A. E. Ansell, president of the Otago Motor Club, at a meeting on Tuesday evening, and carried unanimously. Mr Ansell said that the executive of the club had not considered it wise to enter into an arrangement to import petrol, but in Canterbury ant. Wanganui they had such schemes working, and ha understood that the Auckland motorists were also moving in the same direction. He would like to give them some figures which had been obtained from the Comptroller of Customs, and they would then be able to see for themselves how the prices ranged. These figures represented the current domestic value in the country of export, plus 10 per cent. In 1926 New Zealand had imported 44,817,512 gallons of petrol, and in 1927 48,042,640 gallons. In 1926 the average cost per gallon was Is 2d, and the wholesale price Is lOd, giving a gross profit of 8d per gallon. In 1927 the average cost was lOd per gallon, and the wholesale selling price Is 7d. Here there was a gross profit of 9d per gallon. In 1928 the cost was 7Jd per gallon, plus the petrol tax of 4d, or Hid, and the wholesale selling price was Is lOd. showing a profit of 10|d. These were the cost prices, plus 10 per cent., so from the Is 2d they had to deduct lid. from the lOd Id, and from the 71d Id. They had, as be said, imported in 1927 48 odd million gallons of petrol, and, working on a profit of only Id per gallon, they had a total sum of £200.000. They would see that if they took the difference between the gross profit of 8d in 1926 and of 104 d in 1928 it meant that the motorists, farmers, and fishermen in New Zealand—basing his figures at 48.000.000 gallons—were paying the petro] companies £500.000 more than in 1926. This was despite the fact that they were led to understand that the bowser distributors were going to lessen the costs of distribution. They had come to the position that petrol was dearer in New Zealand than anywhere else in the world, with the exception of Spain and Italy. He had recently come across a representative trade man in Wellington, continued Mr Ansell, and he had told him that he had been in America in October of last year. The best grade of petrol was then being sold in America retail from the bowsers at sjd per gallon, with lower grade at a correspondingly cheaper figure. In England the price recently, •with the petrol tax added, was lid to Is. Mr Ansell said that in justice to the representatives of the petrol - companies in Dunedin he would like to nut their argument before motorists. They had pointed . - out _ that tho cost . of distribution in New Zealand was

much higher than in other countries, because of the scattered population. He thought there was a good argument there. Another argument put forward was that they had a higher grade of petrol in New Zealand than was in use in America. That might be quite correct, but it did not account for the discrepancy of in America and 2s or 2s Id in New Zealand. They had also to remember that in the country districts they had to pay a higher distribution cost, and this meant that they had to pay even more for their petrol than they did in the centres. He thought that the petrol companies had a case to answer, and they were asking the Government to say whether or not there was profiteering. If the petrol companies were going to take such a large slice of the cake there was going to be considerably less for the rest of them. The speaker then quoted extracts from the Board of Trade Act to show that the Government had quite sufficient authority to move. Mr 11. H. Henderson said that a profit of approximately lOd per gallon meant in round figures a profit for the whole of the companies in New Zealand of about £1,000,000. This amount was more than the whole of the taxes paid by motorists — the 4d petrol tax, licenses, registration, etc. They should remember, however, that these companies were not the parent bodies in America—they were subsidiaries. The Shell Company in New Zealand, for instance, seemed to be an offshoot, and it might be able to show that on the price it had to pay for its petrol its profit was quite a reasonable one. The same position might apply to the other companies. Still, the true position of the companies might not be disclosed.

In the discussion which followed Mr W. Saunders wanted to know why motorists had to pay 2s 2d per gallon in Wellington at the bowsers, whereas the price here was 2s.

The chairman replied that the Wellington retailers were apparently getting a higher rate of profit.