PETROL PRICES

Manawatu Standard, Volume LVII, Issue 181, 2 July 1937, Page 2

PETROL PRICES

NEW REGULATIONS. AFFECTED AREA EXTENDED. Per Press Association. OPOTIKI, July 1. “In furtherance of the Government’s intention to fix the price of motor spirit in the various districts throughout New Zealand, regulations determining the maximum wholesale price and the margin of profit to be enjoyed by resellers a.re to-day being brought into effect in the Taranaki, Wanganui, Shannon, Foxton, Levin and Paekakariki areas,” said the Minister of Industries and Commerce (Hon. I>. G. Sullivan) in an interview. “Strong representation from these areas has been received by the Government to fix the price of motor spirit, due to indiscriminate price cutting that was interfering with the legitimate reseller. It has been my desire to stabilise as far as possible existing conditions in the industry, and a very intensive investigation into the methods of sale and distribution in the areas to be covered by the regulations was carried out.

“When all the facts were put before me it was evident that some real problems presented themselves by virtue of the fact that the oil companies employed different methods of distribution. As indicated in previous announcements, I had a further difficulty to face in connection with the advance in the wholesale price of motor spirit, which had risen through world prices having increased and tanker freight rates had literally soared above the rates being paid by the oil companies last year. I am now satisfied that the prices set out in the schedule to the regulations are fair and reasonable after taking into account the changed overseas conditions over which the Government has no control.

“Due to the difficult problems with which I was faced in connection with the fixation of the price of petrol in the additional a.reas now to be covered, the regulations take a slightly different form from those operating in other fixed price areas. The difference lies mainly in the fact that, instead of gazetting a fixed wholesale price, 1 have decided to adopt a maximum wholesale price and provide for the usual fixed gross profit margin of 3d per - gallon to resellers. Those wholesalers who have accredited or B depot agencies will be permitted to allow these agencies whatever commissions they consider are justified, but in no case mu6t the retail price be higher in the various defined areas than the maximum wholesale prices provided for in the schedule to the regulations plus the resellers’ margin of 3d per gallon. . , “I believe now that most of the difficulties that are likelv to be met in pursuing a policy of fixation of petrol prices have been covered by the regulations to come into force to-day, and T therefore do not anticipate having anv undue delay in bringing down re-o-ulatioiiH in other areas where the resellers have requested price fixation. Tn accordance with the pre-election pledges of the Government some ot these investigations have already been carried out and I am hopeful that the respective regulations will be introduced in the very near future. “In connection with the situation as it operated in the district now to be covered by the regulations, strong representations were made by resellers in regard to the operation of co-opera-tive dairy companies in reselling petrol at reduced prices in competition with local resellers. In this regard I met a representative deputation of resellers in Wanganui and indicated on that occasion that l thought if an amendment to the Motor Spirits (Regulation of Prices) Act, dealing with the granting of rebates were introduced, so that cooperative dairy companies could distribute anv profits made on the 6ale of motor spirit in such a way _as not to contravene the relative section of the Act, their difficulties would be met. It is rav intention to do this at the forthcoming session of Parliament, and I feel that such action will further tend to stabilise the whole reselling industry in the areas io be covered by price-fixing regulations.” The scheme is already operating in AVellington, Manawatu, Christchurch, Mid-Canterbury and South Canterbury.