WORLD OIL WAR

Rotorua Morning Post, Volume 2, Issue 562, 20 June 1933, Page 2

WORLD OIL WAR

OVER-PRODU CTION AND PRICE CUTS. • iWhy have there ibeen four drops in price, aggregatinig 4d a gallon, in the price oi; first-grade petrol since Jariuary, asks a writer in the Sydney Ref eree. I The Durilop-Perdriau Bulletin sup- ; p-lies tha following explanation:— "W'hile all motorl users throughout ; the Commonwealth appreciate the ■four drops, aggregating 4d a gallon, in the price of first-grade petrol since last January, many are curious ' as to what has: brought about the reductiiori. Australia is riot the oriiy Country that for fhe present is being blessed with cheaper petrol, the redu6tio,n being wbrld-wide. Overi-pfOL durition of o'il is the bh'sic cause, followed hy a breakdown in the efforts to ■prorate output from the big fields in North and South America, Sumatra, and Rumania. "An oil 'League of Nations,' known ias the world's oil conference, has for the last two years been makirig desperate efforts to stabilise rroduction, with' a view- to keeping the oil industry on a profitahle basis and out of the bankruptcy court. Last year the Oil League at the Paris Conference succeeded iin patching up the bitter petrol prioe-war, by parcelling out the world into territories, and .striiving to anaintain prices by allotting quotas. That international marketing agreenient has now apparently broken down, and the oil war is on agaiin. U.S.A. Hard Hit. "Since 1930 the exports of refined oil p'roducts from U.S.A. have declined 342 million gallons, or 17 per cent. of the total, the trade having gone to outside compe'titors. While America is still ahead of all other suppliers of .petrol, she is losing her position, and the Dutch West Indies, Persia and Rumania ar.& creeping up. In 1932 U.S.A. had 29.2 per cent. of the world's 1110101* spirit trade, the West Indies being next with 17.9 per cent. "It appe'ars that there are two factors responsible for the cut-throat competition — Rumania, and the independent producers outside the major oil group in America. Rumania does not wish to wreck the conference's stabilisation scheme, but as oil is that country 's major export, and the chief support of her budget and currency, she canno.t alford to restrict. production beyond a ceFtain point, without national bankruptcy. Her quota has been encroached upon by independent producers ooutside the control of the Oil League. "iEfforts to protect Rumania's "markets f ailed, and that country's oil magnates restarted full production, and last year flooded the world's markets with an excess supply of many millions of tons of oil. "Coupled with this is the fact that some of the radnor oil companies in America have been wrecked financially, a.nd their wells and plants bought i up at low prices. This has enabled ' some of the dndependents (without the vast overhead burden of their predecessors) to sell at lower prices than the major corporations, with their huge capitals, organisations, and public service facilities. "These are two of the chief causes of the renewal of the world- wide oil war, and why petrol prices have fallen in Australia." The Dunlop-Perdriau Bulletin omits to mention Russia in the world situation— the Soviet, with its vast petrol respurces, its tremendous production, and its dumping proclivities, is a big factor in the oil war. Taxation of Companies. In Australia, the oil companies have their local "headaches." The receat notices in the Press by the Shell Co. • indicate some tremendous cutgoings. For instance, of its total paymenoS of over five millions in 1932, two-thirds of this sum were paid to Federal and State Governments; and iri the last years the companyi has paid over la millions in income tax.