NO DOLLARS SAVED

Otago Daily Times, Issue 26627, 25 November 1947, Page 6

NO DOLLARS SAVED

STATE ENTRY INTO' OIL TRADE

SHELL COMPANY’S VIEW P.A. WELLINGTON, Nov. 24.

“ The impression that additional dollars will be saved is false. The entry of the State oil company into the New Zealand market will not result in any additional saving in dollars whatever to the sterling economy as a whole, of which New Zealand forms an integral part,” said Mr Peter McGlashan, acting general manager' of the Shell Company. Mr McGlashan said his company felt it must reply to statements by officials of the British Petroleum Company of New Zealand, in which the State has a controlling interest, particularly to the statement by Mr G. G. G. Watson, chairman of directors of the new company, that it was looking forward to the time “when the company would be supplying British petrol in British ships to New Zealand. When this is achieved it will mean a great dollar saving.” Mr McGlashan said the tenor of statements by senior officials of the new company implied that the existing oil companies at present marketed only dollar petrol in dollar vessels, and that the importation of sterling petrol by the new company would be a highly desirable departure from the present methods. _ Not Sufficient “ The whole production of British companies is at present insufficient to meet the demands on them for petroleum products,” said Mr McGlashan. “ Therefore, to satisfy even the current rationed level of consumption in Bri-

tish territory, the deficiency must be made up by the importation of petroleum, particularly petrol and fuel oil from dollar sources, by the British oil companies. In spite of strenuous efforts this position is likely to persist for at least two years until the necessary new refineries and tankers are built and are in full operation. It makes no difference to the sterling economy whether this balance of requirements, which must be imported from dollar sources, is imported into New Zealand or into the United Kingdom, or any other part of the Empire." Mr McGlashan said that the only methods of saving dollars in connection with petroleum were:—First, to increase production by British companies and to restrict the present overall consumption in the sterling area until that increased production was achieved: and, secondly, to make the greatest possible economy in the use of tankers by employing them in such a way as to achieve short hauls. The acute shortage of tankers, both British and American, was a big factor in the present oil shortage as was the present serious world shortage of steel for the construction of new refineries, storage tanks and pipelines. It was for the latter reason that the United Kingdom was largely supplied with petroleum from dollar sources, whereas most of the British companies’ production in the sterling area was consumed in the Middle and Far East and New Zealand and Australia. Two-way Trade “We, as a British company, recognise that just as we are freely permitted to sell products in the American market, thus earing much-needed dollars, so must the products of American' companies, whether of sterling production or otherwise, be freely acceptable in British markets,” said Mr McGlashan.

He emphasised that all the major oil companies operating in New Zealand were solidly behind the efforts to conserve petrol to save dollars and thus aid Britain. "As a matter of interest, and not in order to claim any special dollar savings, 68 per cent, of all the petrol imported into New Zealand in 1947 will be from areas geographically in the sterling area,” added Mr McGlashan. “Furthermore, the entire importation of petrol so far in 1947 by the Shell Company has been in our own British ships, and a substantial proportion has been, not only from sterling area sources, but actually from within the British Empire. These last facts are presented merely to show that the introduction of the new company to the New Zealand market will not bring about the introduction of British petroleum products, as these have been on the market for many years.”