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Peters Speech: What is the future of Marsden Point

Extracts from a speech by the Rt Hon Winston Peters to a public meeting at the YMCA Community Centre, Queen Street, Masterton

12.30pm Wednesday 13th October 1999

Themes: “Petrol prices are not falling - they are rising dramatically.”
“What is the future of Marsden Point?”

Since 1994 New Zealanders will have observed that some big businesses in New Zealand can do whatever they like at enormous cost to consumers and other businesses.

Labour and National will do nothing to stop them.

For example, neither party will regulate against monopoly electricity pricing at the retail level. Neither will regulate against Telecom monopoly pricing which last year delivered a return on shareholder funds of a massive 42%.

The last 24 hours have shown how the New Zealand consumer has again been rendered defenseless against the machinations of the multi-nationals that now dominate our economy.

It is hard to believe that premium grade petrol was worth $1.00 a litre yesterday, and that somehow it is worth a whole 3 cents less today.

It is harder to believe when, three months ago, the same petrol was 85 cents a litre.

And it is even harder to believe that the petroleum companies acted independently with all claiming the price of crude oil as the common factor.

Let me give you the facts.

In 1982 the average price of crude oil from the Brent field off Scotland was US $32 a barrel. The per litre pump price in New Zealand was 62 cents.

In 1989 the comparative prices were US $18 per barrel and 87 cents (NZ) per litre.

In March 1999 the price of crude was US $12.76. The price to you and I was 86 cents (NZ) per litre.

The figures speak for themselves. We are paying more now per litre when the per barrel price is much less than half what it was in 1982.

In the past 24 hours you’ve had Ministers and commentators talk about cheaper petrol prices.

In reality, the exact opposite is the case.

The Government will not do anything to create genuine competition. It believes in the shibboleth of industry self-regulation.

It probably believes that pigs fly.

Who suffers? You and I and every motorist.

New Zealand First will not tolerate the constant gouging of the consumer by the petroleum industry whose members act in collusion with each other.

They set the prices you pay at the petrol pump. First they put prices up by sixteen cents a litre, then like this morning they reduce them by three cents a litre to create an impression of prices falling.

Let me give you an example.

A decision by Justice Peter Salmon in the Auckland High Court last week found that Caltex, Mobil and Shell deliberately and jointly broke the law in offering, then withdrawing, a free car wash offer to consumers in 1996.

That was after the companies decided their cosy little deal was costing them too much.

Now that might not sound like much but the principle is hugely important.

Justice Salmon said that a notable feature of the evidence was the fact that some people with key decision making roles were not called by the companies to give evidence.

One of those companies, Mobil, did not call any witnesses as to the facts.

There is a simple and an ugly term for that behavior. It is price fixing.

In legal terms it is a rort. You and I know it as a rip-off.

The Commerce Commission may not seem to do very much, but in this case at least I am pleased that it brought a prosecution.

But what has the Government done to bring these international price gougers under control?

Nothing--and one can only wonder why.

Should you or I believe the hired soothsayers of the petroleum companies when they say prices to you and me must go up because of an international conspiracy to raise prices?

I do not believe it.

Nor do the New Zealand experts on the subject in the Ministry of Commerce.

This is an official report to the Minister of Commerce dated 12 August 1999 in which officials warn that petroleum retailers may be using crude oil increases to increase profit margins

Has the Minister done anything about that report? No.

That is hardly a surprise. When big business is concerned this Government never does anything.

The next thing to be sold will be the Marsden Point Refinery.

Now, all was not well with the whole "Thing Big" programme of the late Sir Robert Muldoon.

But the expansion of the refinery was critical to New Zealand's self-reliance in energy at an important time.

It has proved its worth.

Today it is a relatively small but top-notch refinery. It provides a significant contribution to New Zealand's export proceeds because in the process of breaking down crude oil from Indonesia into petrol, the refinery produces a high quality aviation fuel which mostly gets sold to Australia at a fair profit.

This does not worry the petroleum companies who own the plant, and who are thinking about shutting the place down.

New Zealand already imports roughly one third of the petrol that goes into our tanks from Singapore.

The petroleum industry is thinking that it may well be better for them to bring in all the petrol that goes into our tanks from Dubai or Singapore.

The plants in those countries have huge and cheap work forces. Their owners enjoy huge profit margins on those plants.

Margins better than they can get here.

That is international business, but why are New Zealand consumers not receiving any protection from these commercial predators?

The real question is: are these charges fair or are they the sign of a cabal operating against New Zealand’s national interests?

Any increase in petrol prices affects not only household budgets but every productive enterprise in our country.

It is of critical importance to all of us.

It is too important to be left to the industry itself.

New Zealand First will establish an Energy Pricing Commissioner to constantly check on the petroleum companies and keep them honest.

ENDS

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