asked the Minister for Transport and Power the total amount of oil and oil products held in reserve stocks, in compliance with EEC regulations and the IEA agreement, either in this country or abroad designated for this country; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Oil Reserve Stocks.
18.
EEC Directives require member states to adopt such laws, regulations, or administrative provisions as may be appropriate in order to maintain at all times their stocks of petroleum products at a minimum of 90 days average daily internal consumption in the previous year. The International Energy Agency at present requires member states to hold 60 days' reserves.
Under regulations made by me in accordance with the European Communities Act, 1972, oil importers of 5,000 tonnes or more a year and large oil consumers of 20,000 tonnes or more a year are required to hold reserves of not less than 55 days' supply. In addition, under an agreement with Gulf Oil Terminals (Ireland) Ltd., a reserve of not less than 135,000 tonnes of crude oil is held at Whiddy Island. For the purposes of compliance with the EEC directive, crude oil reserves may be regarded as constituting oil product reserves in accordance with formulae set out in the directives.
On the basis of the reserves held by or on behalf of oil importers and consumers here and abroad and the 135,000 tonnes of crude oil held at Whiddy, the returns made to the EEC show this country as having the following oil reserves as at 1st November, 1975:
|
Motor Spirit |
69 days |
|
Middle Distillate |
70 days |
|
Fuel Oil |
92 days |
The overall weighted average comes to approximately 82 days, which is higher than the current requirement of the International Energy Agency but below the level of the EEC requirement. The Commission of the EEC has requested information and observation from a number of member states, including Ireland, about the application of the directives and we are in correspondence with the Commission in the matter.
I am, of course, concerned to have a higher level of reserve stocks. Among the measures which I propose to adopt in the near future is to increase the minimum stock requirement for oil importers and consumers by an additional five days and to bring consumers using 15,000 tonnes or more a year within the scope of the requirement. The possible arrangements by which we can further improve our emergency reserve position are under continuing examination in my Department.
Based on the figure of 82 days' reserve stocks on 1st November, is the Minister aware that the companies, due to the recent increase, have received approximately £12 millions in stock profits?
I do not know how the Deputy decides that.
By a simple calculation on the Minister's figure.
They must hold an 82 days' reserve. Under the regulations that I signed in November, 1974, they have to hold 55 days continually for us.
And the Minister is satisfied that they are holding it?
I am quite satisfied that they are holding that and I will be increasing it to 60 days in the new year.
Did the Minister include the ESB in the 82 days?
Yes, the ESB are importers of oil. I said that importers of 5,000 tonnes or more are bound to hold 55 days' supply which will be increased to 60 in the new year.
That means that, excluding the ESB, the companies and those concerned with the companies reserve stocks in this country, and the extra profit on those stocks would amount to £10 million.
The Deputy is making statements rather than asking questions.
I do not know how the Deputy is arriving at those figures. He is trotting them out here and I do not know what basis he is using for his calculations. The fuel oil I mentioned in regard to the 92 days can be translated into product for the purpose of these directives but, of course, it is not saleable as product.
Is the Minister aware that if you apply an increase of 4p per gallon across the board it amounts to £10 per tonne because there are 250 gallons to the tonne?
We cannot debate this matter now.
The Minister asked me how I arrived at it. At £10 per tonne, excluding the ESB, it will come to £10 million extra profits as a result of the recent increase.
They cannot sell the 55 days.
This is leading to argument and debate. We cannot have this.
Is it a fact that oil is bought at a low price and sold at the higher price?
No. The National Prices Commission are very conscious of people taking what they call stock profit. They have examined this very carefully and they would not give the go-ahead to the oil companies to increase the price unless they were quite satisfied that there was no such element involved.
I must ask the Minister——
A final supplementary.
I am talking about £10 million extra profits.
We cannot debate it now.
For two years the Deputy has been trotting out these figures and he is the only one who believes them because they cannot be substantiated.
Has anybody disproved them so far?
Yes.
I have not seen it.
The National Prices Commission.
Question No. 19.
Based on the fact that it takes 60 days from the time the oil leaves the well-head until it reaches the consumer——
Is that coming round the Cape or through Suez?
That is information straight from one of the Sisters.
This is old information again because the Suez Canal was opened this year and, therefore, the time is cut down.
This is information that I got last Wednesday and it is not old information.
Question No. 19. Will the Chair please be obeyed?
Considering the 60 days, or even less, it means £10 million going into the coffers of the majors as a result of this increase. It is bought at the low price and sold at the high price.
Deputy Barrett. Next question.