Petrol and Its Supply

Sun (Auckland), Volume II, Issue 468, 25 September 1928, Page 6

Petrol and Its Supply

Point of View of Retailer

In New Zealand, on the average, one person in eight owns a motorvehicle of some sort or another, and the quantity of petrol used per capita is greater than in most other countries.

An adequate supply of petrol of suitable quality, and at a reasonable price, is therefore a matter of considerable importance to a very large section of the community. Petrol is not produced in New Zealand, so far, and the market is dependent on importations from overseas. The bulk of the importations, are made by four large companies, which are subsidiary to large oil concerns overseas.

In respect of adequate and reliable supplies and quality there is little cause for complaint, but many people are of the opinion that the retail price of petrol in New Zealand is too high compared with its price in other countries. This opinion has been fairly general for a long time, but it has recently become accentuated because petrol has been put on the market by others at a considerably lower price. Less than three years ago petrol was shipped to New Zealand in four-gallon cans, packed two cans to a case, making a unit of eight gallons, on which prices and calculations were usually figured. At the commencement of 1926 bulk petrol came into the Dominion, and storage and transport facilities have now been provided in the principal towns of the Dominion. In the days of case petrol the bulk of the retailing was done by the garages, but the advent of bulk importations has brought the petrol station pure and Simple into the trade, and the sale of petrol has changed from a side-line to a business.

During the change-over from case petrol to bulk petrol many difficulties cropped up which it was expected would disappear when installations throughout the Dominion were completed, and the bulk method of distribution was fairly established. This expectation has not been realised, and now that bulk distribution is fairly under way. there is still much dissatisfaction, and the lot of the petrol reseller* is an unenviable one. Matters are quickly becoming acute, and it behoves the reseller to take stock of the position and get some idea of what the future has in store for him. The chief causes of complaint may fairly be classed into two headings: 1. —lnsufficient sales. 2. —Unsatisfactory results.

Although the business of selling petrol has some peculiarities, on general lines it is not greatly different from other classes* of business. By the use of sound business methods, hard work, and attention, some men will secure a larger share of the business than others, but in considering the reasons for the complaints of insufficient sales it is necessary to consider the matter from the average viewpoint. In our opinion, the principal reason why sales are so disappointing to the average reseller is that there is too much competition for the business to be done. The sale of petrol is, on the whole, fairly steady, and the probable sales over a period may be estimated fairly correctly. When the total requirements of the market can be so closely estimated, it should have been possible to restrict the total number of pumps, so that on the average the through-put would be sufficient to make the business satisfactory for the resellers. New petrol stations continue to appear, and the number of pumps is increasing in ratio much faster than the demand for petrol, and it looks as though the position was steadily becoming worse. There are other reasons why individual resellers do not sell more petrol, but the reason we have given is, in our opinion, the main one, and it is difficult to see how it can be remedied, excepting by natural economic means. In addition to the competition of resellers trading under circumstances similar to his own, he (the reseller) has to meet competition from outside importers, who are able to import petrol in cases and drums and retail it at .the price he has to pay for his bulk supplies. This competition appears to be extending, and is receiving the support of motorists’ organisations, who are clamouring for cheaper petrol. To meet this competition, the reseller has either to convince his clients that the standard brands of petrol are worth the difference in price asked for them, or cut his own profit to meet the price. He cannot meet this demand by handling these outside lines himself, as his pumps are tied, and many a reseller is faced with the position of losing his trade or cutting his price—certainly a choice of two evils. It seems a remarkable thing that case petrol can be sold at a lower price than bulk petrol, as we were given to understand that the installation of a bulk system would mean a saving of at least three shillings a unit of eight gallons, and would put case petrol off the market. To-day case petrol is being sold at 2s a unit of eight gallons less than first-grade bulk petrol, and it is difficult to understand how this is- possible. It is

THE question of the sale and price of petrol is one of great interest to the motoring public, and in the following article from “The Radiator,” official organ of the New Zealand Motor Traders’ Association, consideration is given to the point of view of the retailer.

claimed that many of the outside brands of petrol are of poor quality, but this cannot be so with all, as some brands have been on the market for a considerable time, and are giving entire satisfaction. In any case, any difference in quality would not account for the wide difference in price when case petrol can be sold so much lower than bulk.

In our opinion, it is the business of the oil companies to enable their resellers to meet this price competition, and sooner or later this will have to be done. The right thing for the reseller to do is to stand firm for a price that will yield him a payable margin. If he cannot do business on these lines, it would be better to give up his pumps than to trade on an insufficient margin.

QUARTERLY BULLETIN A.A.A.’S SERVICE TO MEMBERS The A.A.A. has published No, 1 of a quarterly bulletin which is intended to keep the members in touch with the association’s activities. The bulletin gives interesting information about membership, motor regulations and driving conditions, and summarises the quarter’s work under the headings of Touring Department, Patrols and Technical Department. NEWS IN THE BULLETIN The Touring Department advises that a comprehensive scale map of the North Island has been prepared in four sections, various classes of roads being indicated in distinctive colours. Mileages between important points and location of camping grounds are included, together with points of historic, interest. This new map will be ready in October.

A neat pocket booklet with lists of official camping grounds and hotels throughout the island is being prepared. New maps have been prepared for Gisborne and Rotorua districts, and others are in course of preparation for Whangarei, Hamilton and Waikato, and Auckland North and Auckland South. The signposting patrol has erected 419 signs and 80 depth posts. Regarding the importation of petrol for members at a reduced rate, the bulletin states that arrangements similar to those made by the Canterbury Association have been made by the A.A.A. Council, and- confirmation of shipment is awaited before detailed advice is sent to members. MOTOR CAMP A special section of the bulletin deals with the efforts made by the council for a motor camp near Auckland. It states that previous efforts were unsuccessful owing to legal difficulties that existed in' utilising for this purpose any portion of a public reserve (including, presumably, Mount Hobson).

A clause has been inserted in the Public Reserves Bill, which is before the House this session, and which, if paused, will remove this difficulty. The section concludes: “A deputation recently discussed the position with the Parks Committee of the City Council, and the efforts of the council to have a camp site close to the city established are being continued."

NEW CAR INTRODUCED LATEST LEA-FRANCIS MODELS new car shortly to be introduced is the famous British Lea-Francis winner of the 1928 Tourist Trophy at Belfast last month. ai V l c^e an ? is make fou r different models, 16-60 six-cylinder with overhead valves, two overhead camshafts vacuum Dewandre four-wheel brakes four-speed gearbox, and free wheel extra™ 188 * 011 ’ wllich ls an optional

The 14-40 is a similar chassis to the above, except for the smaller bore and stroke engine. The litre super-charged hyper-, sports is a car with terrific acceleration, high maximum speed 90 miles an hour, yet as tractable as a touring car. This chassis is powered with a fourcylinder O.H.V. engine, fitted with a super charger, and is the standard chassis that was so successful in the Tourist Trophy event this.year. The 12-40 chassis is equipped with a four-cylinder engine, overhead valves, four-speed gearbox, and vacuum four wheel brakes. This chassis is also fitted with the free wheel, which is not an experiment, but is a standardised unit in the Lea-Francis construction.