REAL COMPETITION FOR PETROL BUSINESS.
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WE ARE GLAD to bet able to announce our conclusion, after examination of numerous factors in the situation, 'that 1922 will witness the breaking-out of real competition between the big petrol suppliers. To-day there is nothing more cheering for the user than freedom for members of the ring to compete for his orders at agreed prices. The pioneering' tastes of oil prospectors and getters have nothing to do with the case, for these, on the, marketing side, have seldom led in any direction but that of selling at what the article will fetch—after inside agreement. That avowed rule was broken when the Samuel familybrought down prices in 1904—of petrol to 9c1. a gallon retail, and of paraffin to ad. a gallon retail. That price war is to memory dear.
"The price of a commodity is what it will fetch," said Sir Marcus Samuel (now Lord Bearsted) in a speech at the R.A.C. in 1914. History is about to test once more the accuracy of his utterance, but this time, happily, in respect of downward movements: once, twice, and even thrice, will the price of petrol again be cut before the spring of 1922. The acute stage will be evident in less than six months, and we hesitate to .estiniate bottom prices. ea
It is not the free-lance cargoes of petrol that account for pending changes, or the disruption of the oonferences round that fateful board at which motorists' money has been apportioned ; they are irritants, we know, but not of sufficient aggregate potency to kill anybody in the seats of the mighty, of the petrol kingdom. It is not love for motorists that is causing this change to come o'er the den ; they are regarded as fair game. It is not fear of taxgatherers that worries our petrol plutocrats; they always have funds to pay taxes. It is not admitted to be any regard for power alcohol; yet .the Standard Oil Co. of America has already purchased control of the Alcoga,s patents (32 per cent. each of petrol, benzole and ethyl alcohol, with 4 per eent, of ethyl ether). It is not denied that profits are 90 large that they can no longer be hidden, with freights and labour falling each month, E.P.D. not to recur, and everything. written down ; but larger and larger profits have never before been found svcause for giving anything away to the consumer.
What, then, are the chief reasons for the intended separation into three main camps during 1922, or see-mar.?
Under-consumption is telling its tale: that is the first reason ef• all, viewed on a world .basis. Forecasts of a year ago concerning shortages have been belied
by facts, in that the great slump in industry, with its reflex upon the volume of commodities to be moved and private surpluses of capital or income, was apparently not taken into the calculations. One consequence of industrial and political upheavals has been relative over-production with accumulating stocks of petrol. These are the interrelated factors that have caused restlessness where harmoniou.s contentment with one another was wont to reign. Somebody has to suffer now, and strong men do not accept other peoples methods for long on a falling market. They set out, in their own minds at the beginning, to reorganize according to their individual opinions and predilections. That is going on. Public changes will follow. Overflowing oil and petrol tanks are about to burst the bonds of trade friendships, which have been based largely on war associations, formed on the Petroleum Supplies Pool Board. That body of men, with the exception of a nominated chairman as
figurehead, was entirely drawn from the ranks of the big oil groups, and they have, so far, hold together wonderfully for themselves sincethe Pool Board officially ceased to function. The. genesis of rupture is already evident in the position now generating over lubricating oils. The Shell bombshell has done it.
Home-produced power alcohol will need its ,eightpence odd per gallon State subsidy, now assured by -law, and portable: suction-gas producers the aid of some spirit to eliminate any hand-blowing at starting or in terminal work, if they are to make headway during the next two years of lively warfare between the cleminant fuel interests. As to the adventurers into the oil world who are now toying with occasional cargoes, we give them a run of four months in which to snatch a profit: Only those who thereafter control their own production and distribution will be able to come through, but the user will come into his own while this great fall-out lasts.