65/ 011.
FOR PRESS P g. No., 14/ 1965
PETROIZUM 1" RODUCTS PRICING PROPOSALS
Statement by the Actinig Prime Minister, the Rt. Hon. J. McEwen
Satisfactory discussions were held today between
Commonwealth and State Ministers on the Commonwealtht a pricing
proposals for petroleum products.
This was announced today by the Acting Prime Minister,
Mr. 51. McEwen, following a meeting in Canberra with State Ministers.
The proposals were put forward by the Com1yonwealth in
pursuance of the Prim~ e Ministeris election promise to do something
Sabout the burden placed upon rural costs by the higher prices of
Vpetroleum products in remote areos.
As indicated in the Prime Minister's election speech,
action by the Commonwealth in this field calls for thle co-operation
of the States and of the oil companies.
The development of a practical scheme for giving
effect to this undertaking has required a great deal of study by
the Commonwealth Departments concerned and long negoti. ations with
the oil industry and discussions with State officials.
Commonwealth proposals elaborated as a result of this
work were today considered by the State and-Commonwealth Ministers,
and State Ministers agreed to recomnmend to their respective
Governments the adoption of a scheme, the essential features of
which are as follows
The scheme w.-ill apply to motor spirit, power kerosene,
automotive distillate, aviation gasoline and aviation
turbine kerosene.
The scheme will be given effect to by Commonwealth and
State legislation.
In broad terms, the scheme will work as follows.
Subsidy will be paid in respect of sales of the
petroleum products in country locations which, on
June, 1961+, were recognised distribution points
and at which the wholesale price exceeded by more
than 4+ d. the capital city wholesale price. The rates
of subsidy in respect of these locations will be based
on the wholesale prices ruling there on 31st December,
1961+. There will be provision for t'ie determination
of subsidy rates in respect of distribution centres
wihich have or shall come into existence after
June, 1964,. It is intended that the provisions shall
cover consumers in remote areas.
Rates of subsidy in the Northern Territory and the
Australian Capital Territory will be related to
Sydney prices.
The oil industry will undertake to pass on to the
purchasers in reduction of its wholesale prices the
full benefit of all subsidy received. 9 e a./
-2
The Minister for Customs and Excise, Senator Anderson,
will be responsible for the administration of the
scheme. Distributors of petroleum products will be
registered. The actual payments of subsidy will be
made to registered distributors by the States. Claims
for subsidy will be examined by officers of the
Commonwealth Department of Customs and Excise, acting
under the authority of the State legislation,
The rates of subsidy, as initially determined, will not
be varied to take account of day-to-day changes in circumstances.
Consequently, should costs of distribution change, the wholesale
Sri ce at some locations may come to differ by more or less than
d. from the city price.
After discussion, the Commonwealth undertook to make a
general review of the rates of subsidy after the scheme has been
in operation for three years.
The necessary Commonwealth legislation will be introduced
in the coming Session of Parliament and the States will be asked
to introduce legislation as soon as practicable. The scheme will
come into operation shortly after the necessary State legislation
has been passed. It is hoped that it will be in operation by
1st October. Mr. McEwen added that the Commonwealth Government was
pleased at the helpful and co-operative approach adopted today
by the States and by the oil companies in recent discussions.
The following Ministers attended the conference
The Rt. Hon. J. Mc~ qen, Acting Prime Minister
The Rt. Hon. H. E. Holt, Treasurer
The Hon. D. E. Fairbairn, Minister for Bationa1
The Hon, B. M. Snedden, Attorney-General
Senator the Hon. Ken Anderson, Minister for Customs and
Excise.
New South Wales: The Hon. J. 5. Maloney, Minister for Labour
and Industry
Victoria : The Hon. V. F. Wilcox, Minister for Imiaigration and
Assistant Attorney-General
Queensland : The Hon. T. A. Hiley, Treasurer
The H~ on. G. VW. W. Chalk, Minister for Transport
South Australia The Hon. Sir Thomas Pla yford, Premier
Western Australia : The Hon. J. F. Craig, Minister for
Transport
Tasmania : The Hon. E. E. Reece, Premier
The Hon. R. F. Fagan) Attorney-General.
CANBERRA, February, 1965,