§ 85. Mr. Ellis Smith
asked the Minister of Fuel and Power when the consultations and negotiations with the Standard Oil Company of New Jersey about their offer which led to the de-rationing of petrol began; and can he make a report on this.
§ Mr. P. Noel-Baker
Negotiations with the American Government and oil companies over methods of reducing the dollar drain due to oil started in September, 1949. The plan for substituting surplus sterling oil for part of the oil imported into the sterling area by American companies from dollar sources was put into effect at the beginning of this year, and in February, 1950, the Government put forward an incentive plan, the main principle of which was 179W that, if the American companies would increase their expenditure in the sterling area, we would thereby earn dollars to pay for more of their oil. Negotiations on this incentive plan are still proceeding.
Meanwhile, on 8th May, the Standard Oil Company (New Jersey) made an offer to bring in more petrol for sterling if petrol rationing were removed; and they agreed to spend the sterling in the sterling area on the purchase of additional goods and services including tankers. Agreement on this offer was reached with the Jersey company and the California Texas Company on the morning of 26th May; I informed the House of the derationing of petrol on that day.