Petroleum Spirit Supplies.
Page 15
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Why Should Not a Company be Formed by Motorists in the Interests of Motorists?
" 11" hat NN 01lid hapiwn if tiic price of petrol were doubled ?" I was asked the other day, and the question gives serious subject for thought. I suppose few of the readers of " TILE Mo-roa," or few motorists at all, for that matter, have ever seriously considered the subject, and that to such a question nine out of ten would reply : " Well, it would cost us a little more for petrol, that's all." And, so far as the pleasure car user is concerned, that would be about the end of it, for, as every motorist knows—in spite of the serious enquiries on the subject one meets with from novices at shows --the cost of fuel used is the smallest item in the motorist's annual expenses. But with cars that are used constantly, all day and every day, and particularly with the motor omnibus and lorry, whose consumption per car per annum is large, the question assumes a totally different aspect. I believe the average daily petrol consumption of a motor omnibus is from 15 to 20 gallons. lf, for ease of reckoning, we take the latter figure and allow for 3oo working days in the year, we get an annual consumption per bus of o,000 gallons, so that it will be readily seen that even a slight increase in the cost of fuel per gallon will make an appreciable difference at the end of the year. To carry the matter a little further, let us take the case of a bus company running moo buses. Its annual consumption of petrol will approximate 600,000 gallons. If, therefore, the price of spirit were increased but 2d. per gallon, the additional expense for fuel would be E,5,000, and as the capitalisation of a motor bus company is about 4;1,000 per bus, it will be seen that a 2d. increase in the price of petrol would affect its shareholders to the extent of a five per cent, dividend, and an increase of 6d. would deprive them of 15 per cent. of possible dividend, and make the present rosy bus company balance-sheets look poor; and when competition reduces profits, as it must in the course of time, such increase might even cause it to be a question whether the company can he run at a profit at all! So much for the importance of the fuel question to large users. The danger lies in the fact that we are largely in the hands of a few individuals; we know how the big oil trusts of America have acted in the past, and how they have made the huge fortunes which are now matters of history. It is but a year or two ago that petrol was nearly double the price it now is, and we were told at the time that the cause of the then big rise was due to the fact that the spirit formed but a small proportion of the product of the wells, and that when the spirit was extracted the residues were left unsold. Spirit sales have increased enormously since then, and the price has decreased to its present low level, so that the solidity of the argument may be doubted. Moreover, we have it on the authority of one of the greatest figures in the industry that thousands of gallons of oil (almost entirely potential motor spirit) are daily run to waste at the wellsa wicked waste of nature's bounteous gifts to man—so that it is plain the possible supply to-day is far in excess of demand. It is also known that the cause of the price reduction was not any philanthropy on the part of the oil magnates, or any increased demand for the residues, but simply the competition of the mrnpanies exploiting new oil lields in Borneo and hitherto unworked districts. Rumours have, however, been for sonic time rife in trade circles that the oil people are gettingtired of competition amongst themselves, and that combination is in the .air, and we all know that when big money is about, even threetors of oil companies are but human, and, in spite of assurances to the contrary, may be expected to succumb to the temptation when the temptation gets strong enough. A penny rise has been spoken of as imminent for months, and the stories of agreement and price advancement grow stronger every day. So that it is clear we may expect a rise before long, and if Id., why not 2d., and if 2d., why not more, and why should not the price get up to the figure of tow, and even go beyond it? Oil combinations and other monopolists are not philanthropic institutions, and, once the combine is made, they may be expected to use their advantage for all it is worth, and annex the immense fortunes which would result. Such a condition of things would seriously affect the motor trade in general, and would well nigh paralyse the motor-bus industry. Those most interested will
do well to consider whether it is not possible to create such a condition of affairs as will render them independent of the oil companies in conserving their interests by the formation of an oil company of their own. I presume it is still possible to secure oil tracts in Borneo or some other field, and if this were done by a combination of motor-bus and other firms and individuals who were large consumers of petroleum spirit, the prices could be kept at a figure which would not interfere with profitable working. It would not be a light matter to accomplish this, however, as large capital would be required.
To secure the desired object such a company would have to arrange for supplies which would be equal, not only to the present, but also to the future possible demand, and to ascertain that we must look at least three years ahead. By then I believe I shall be within the mark if I. say there will be 2,000 omnibuses in regular daily use in London alone, and as many more scattered about in the provincial towns and cities. It is no exaggeration to estimate that there will be so,000 motorcars in the hands of private users, to say nothing of commercial motor vehicles and motorcycles. Now, on the figures given in the first part of this article, the omnibuses alone will consume some 24,000,000 gallons of spirit annually ; the pleasure cars—averaging them at 300 gallons apiece—would take 15,000,000 gallons, and the commercial vehicles probably as much more; so that an annual supply equal to about 54,000,000 gallons would have to be provided for. Then again, there would require to be provided the necessary installations for distillation, and treatment and storage, both at the wells and here, as well as a fleet of tank steamers to convey it from the port of production to the markets of the British Isles, and the transportation of 54,000,000 gallons of spirit—to say nothing of the residue products—would, allowing for a three weeks' voyage either way, with reserve ships and port delays, require a fleet of somewhere about thirty 2,000 ton vessels, and I think if anyone will go into figures for all these requirements he will lind that the capital required for such a scheme would run up to well beyond -,C1,000,000; but if such a scheme were carried out, and by it the motor industry were enabled to keep the petrol supply in their own hands and prevent a possible rise of only 2d. per gallon, the saving would equal L:450,000, and the expenditure would well repay the outlay if the money in the first place could be found by those interested. If our bus companies and our railway companies who are now so largely interested in motor traffic were to combine, the thing could no doubt be done. I throw out the suggestion for what it is worth, and it will be interesting to have criticisms upon it from those better acquainted with the subject than myself.Henry Sturmey in "The Motor."