I move:
That Dáil Éireann deplores the handling of the energy crisis and calls on the Government to inform the House of its future policy on energy.
I should say at the outset that in setting down this motion for consideration by the Dáil I was not concerned to make political capital from the serious problems that have arisen as a result of the oil crisis. Neither am I interested in making personal attacks on any member of the Government. However, I feel it is right and proper, because of the concern throughout the nation, that we should ensure that the fullest possible light is allowed into what has become for this as well as every other country in Europe the most sensitive sector in our economic wellbeing.
The ability of the Government to identify the problems, to deal with them and to lay the groundwork to ensure that we learn from them is of the utmost importance to us all. We have certainly gained a great deal of information over the past six months as a result of this crisis. If you will bear with me I should like to highlight some particular events during this time. Each and every event has had one ingredient, I regret to say, at least as far as the public are concerned, and that ingredient is confusion. People have been confused from the very outset and they are still confused to a great degree.
In mid-November last a rationing of supplies was introduced by the companies themselves. This caused confusion initially because of the retrospective element which was involved. People were told of a 10 per cent reduction in petrol deliveries, and yet the ordinary motorist was faced with garages open for only a few hours daily and no supplies at all over the week-end. It is no exaggeration to say that on some occasions in this city these queues erupted into violence as a result of this confusion. The public were bewildered by what was going on. Many people were calling for rationing to regularise the position.
There would have been no such confusion if they had been told the true implication at that time, which was that that 10 per cent cut would be nearly 20 per cent because of the increased consumption during 1973 over that of 1972; and because many of the traders had already, by mid-November, drawn their regular supplies for the previous year, this cut eventually became a 45 per cent for the second part of the last quarter of 1973.
Immediately the Dáil recessed last Christmas the people of Dublin were confused further by the news that the Dublin Gas Company proposed to introduce rationing of gas supplies. It nearly brought them back to the wartime days of rationing. What really happened on that occasion was, as far as I am aware, that one company who had contracted to supply the gas company for a period of seven or eight years or more had cut down supplies of naptha gas to the Dublin Gas Company because their contract was not as profitable as continuing on with this naptha gas and refining it further into petrol products. As I said, this caused tremendous confusion in this city, particularly among the more vulnerable people, the old people, many of whom are depending on the Dublin Gas Company.
Rationing of course suggests that people are told that they may consume a certain amount of any product, and the person responsible for giving them this information would be the Minister. It is probably unnecessary for me to say that no directive came from the Minister on this occasion. All the people were treated to were curtly worded advertisements in the daily papers which were couched in very general terms, telling consumers that they would receive specific details of the rationing scheme at a later date. Fortunately the rationing did not take place, but definitely the confusion took place.
During this time the public learned, probably for the first time, that the oil supply to every section of this country was completely outside the control of the Government. They also were to find out during this period that we refined only half of our total oil consumption, half of the five million tons which are required each year for this nation, and that we were considered as part of the British market for the remainder of the supplies. From the end of December the public had to rely on the various newspaper correspondents to try and get some idea of what was going on in the oil world. Countries that were supposed to be cut off from supplies, but although we were to be quite capable of getting adequate supplies, but although we were repeatedly told we were regarded as a friendly nation our supplies were severely cut back.
It has been the pattern in many parts of the world to make the Arab people the scapegoats for this oil crisis. I am not one who subscribes wholly to this. The Arab people and the oil-producing nations were undoubtedly entitled to more than they were getting for their product, and since it was their main revenue it was only natural that they would look for this. It is quite understandable that they should decide to use it as a political weapon in order to further their own ends in the war with Israel.
However, there were other people involved. The multi-national companies of which we hear so much nowadays were very much involved and these same multi-national companies have approximately 80 per cent of our consumer market here. I shall come to them later. While I do not consider we have yet overcome this problem of supplies, we can at least be grateful that the weather has been kind to us recently, not only here but throughout Europe. This has cased the crisis to a great extent.
The costs of our staggering and childlike actions, as they were, had a more serious effect. The decision to dismantle the price control on oil which was operating up to 5th of last December, was a grievous error. I raised this matter in an Adjournment Debate here on 12th February last and I criticised this action in dismantling price control. The case is a very simple one to understand. It is of the utmost importance to establish once and for all that the Government have the sole responsibility for the price levels of all petrol products sold and consumed in this country. Under the control mechanism now in operation these oil companies are obliged to give only seven days' notice of any further price increases. This has been the case since the 5th of last December. Once they give seven days' notice the proposed increases are permitted as long as they are in line with what is happening within the outer UK zone. It is a great flaw in our price control system that this is permitted to these multi-national companies, who, as I have said, have approximately 80 per cent of the outlets for these oil products in this country.
The Minister for Industry and Commerce on the 12th February last on the Adjournment debate stated that the Prices Commission recommended this link with the outer zone of the UK. On that occasion he quoted an oil company spokesman as confirmation for the need for price increases. He stated that the Arab producers raised their prices on January 1st and that between that date and mid-February our stocks would have been exhausted. This simply is not acceptable as an explanation. Is the Minister aware that the price increase of 1st January, 1974, applied at the Gulf or Mediterranean ports of loading and not in the UK or in Ireland? Stocks held at Whitegate oil refinery and other oil company owned installations amounted to almost 400,000 tons on January 1st. We have confirmation of this figure from the Ministers for Transport and Power and Industry and Commerce when we were told that we had about 45 days' stock. The stock levels in the UK at that time were 55 days.
All these stocks had to be either in the form of crude oil or refined products costing below the price applying at the Gulf or Mediterranean ports on January 1st, 1974. Allowing for time for loading crude oil into the tankers at the Gulf ports or Mediterranean ports, allowing time for tankers to reach the United Kingdom or the Irish ports with the crude oil, allowing for the refining of this crude oil into refined products, then a minimum of four to five weeks must have elapsed before any product refined from crude oil which had to bear the 1st January price increase reached consumers in this country. During the period from January 1st to February 9th, 260,000 tons of refined products were landed in Dublin, half of which came from Whitegate and half from British refineries. During the same period 230,000 tons of crude oil were landed at the Whitegate oil refinery.
It would have been impossible for any of the refined product shipped into Dublin to have originated as crude oil in the Gulf subsequent to the price increase there on the 1st January. It is also reasonable for us to assume, having regard to the procedures at Whitegate oil refinery for handling crude oil whereby some trans-shipment from stocks held at Milford Haven occurred that at least 25 per cent of the crude oil arriving at Whitegate would have originated at the loading port prior to the 1st January.
In addition it must be noted that storage facilities exist in places like Limerick, Galway, Sligo, Waterford, New Ross and perhaps a few other places. Whilst they may not be large they could also have some stocks which were refined from crude oil shipped from the Gulf or Mediterranean ports prior to the 1st January. It is evident, therefore, that the price control mechanism in this country is not effective at the moment. If you take the February rise of between £15-£20 per ton on all products you can see that more than 300,000 tons held in stock benefited from this increase. This is an undeniable fact. I am not saying that supplies were withheld or that stockpiling took place; I am saying that because of these stocks £5 million or £7 million extra profits found their way into the multi-national oil companies because of these stocks and not because of any stockpiling elsewhere.
I have noted a report which has suggested that this increase resulted in a paper profit and that no extra cash could be taken from the business of one company because of the need to pay more money for the higher priced oil at the Gulf after the 1st January. Of course, there was no increase in the price of oil bought after the 1st January if we are to accept that. This is only a cash flow exercise on paper and has nothing whatever to do with what should be an ordinary profit and loss statement by such a company as the one involved.
With regard to the profits, there are many interesting disclosures which we can get from American statements by these multi-national companies. First of all, we had confusion on availability and now we have even more confusion on the price situation. I want to draw the attention of the Government to some facts which have emerged in other countries which I have already mentioned. First, every major multi-national company is reporting massive increases in profits at the moment. Some of these companies have subsidiaries trading in Ireland. One of them has reported an increase in profits of no less than £400 million. To lessen the reaction from consumers in the United States they are publicly advertising in the American Press the fact that the increase in profits took place outside America, particularly in the European zone.
I suggest we are only one of these countries which were involved and exploited in this way by these multi-national oil companies. Time magazine published a report on a Senate hearing in America, at which large oil companies were questioned about their profits. During the last quarter of 1973, which roughly coincides with the Arab oil embargo, Esso's profits jumped by 59 per cent with a profit of $2.44 billion.