FINANCE AND INVESTMENT
(Continued from page 726)
PETROL POOL OPERATIONS
A bit at a time the financial black-out is being lifted. This week we must give thanks to the Petroleum Board for as full a statement of its functions as one can reasonably expect from any of our war-time controls. The Board, it seems, although voluntary, was established in compliance with the Government's wishes. It includes in its member- ship substantially the whole of the petroleum industry on the importation, storage and distribution sides, and all the members pool their distribution resources with a view to maximum efficiency. No precise details are available of any financial deal between the companies and the Govern- ment, but reading between the lines I think it is possible to get a fair idea of the position. The responsibility of obtaining the supplies which go into the pool remains with the companies and the actual allocation of the trade is based on past performance over a pre-arranged qualifying period. Thus, for example, if " Shell " supplied 3o per cent. of the United Kingdom trade in the basis period, it would continue to do so and be responsible for obtaining 3o per cent. of the supplies.
Relations of the Petroleum Board with the Government are concerned mainly with price-fixing. Transport costs to the United Kingdom are borne by the Board and are added, along with marine and war risk insurance, to the f.o.b. price to obtain the c.i.f. United Kingdom cost. Selling prices are fixed by agreement with the Government and must cover the duty of 9d. a gallon, costs of storage and distribution and overhead expenses. It seems, therefore, that the companies' profits are still dependent on the total turnover and the margin of profit per unit sold.
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