OIL COMPANIES MAY BEAR COST.

Star (Christchurch), Issue 19134, 29 July 1930, Page 5

OIL COMPANIES MAY BEAR COST.

RETAIL PRICES OF PETROL UNCERTAIN.

While no official information is available regarding the matter, it is understood that there is a possibility of the oil companies bearing the whole or part of the increase in the petrol tax. This would have the effect of reducing the retail prices to something approaching what they were before the increase in the tax was made.

A considerable amount of uncertainty exists in the minds of motor service station proprietors in Christchurch as to their position in regard to the increase in the petrol tax from fourpence to sevenpence a gallon. When the increase in the tax was made by Parliament most of the service stations raised their retail prices for petrol by an equivalent amount, but the oil companies have not yet made it plain to them what difference is to be made in the wholesale prices. The action taken by the service stations has been a subject of a good deal of criticism from motorists, but the proprietors of these stations cx plain that they had to protect them selves against the possibility of loss in the event of the oil companies putting up their prices by the full araoun' represented by the increase in the tax The position at the present time is that the public are paying three-pence a gallon more for their petrol, and the oil companies have not yet indicated what increase, if any, they intend tc make in the wholesale prices. In Australia an increase from four pence to seven-pence a gallon was made in the petrol tax when Mr Scullin introduced his Budget on July 9, but; a week later the increase had not been passed on to the public. A report appearing in the Melbourne “Age,” of July 16, stated: “Although strict reticence is being observed by the oil companies in regard to the matter, it is confidently expected in motor trading circles that for a few months at least the increase of 3d in the duty on petrol recently imposed by the Federal Government will not be passed on to the public. Some sanguine traders have gone so far as to predict that the extra 3d may not be passed on at all, but there is little doubt that later on there will be an advance, if only a slight one. It is asserted, too, that had not the duty been increased the oil companies would have actually reduced the price oi petrol by about 3d a gallon. Representatives of the oil companies operating in Christchurch have refused to give any indication as to the intentions of their companies regarding the increase in the tax. This attitude is giving rise to the belief that the companies propose to bear a substan tial portion of the increase in the tax In support of his contention that the companies were in a position to bear the increase in the tax, the pre sident of the National Roads and Mo torists’ Association of New South Wales stated recently that in England, ■where the duty was 4d a gallon, petro' was retailed at Is 4d.