asked the Minister for Industry, Commerce and Energy if in view of the recent price increase granted to oil companies and their request for yet a further increase, he will arrange an investigation of the accountancy procedures of the international oil companies with particular attention to the declared profits of these companies.
Ceisteanna—Questions. Oral Answers. - Oil Companies.
16.
I do not think that there would be a great deal to be learned, by way of information of continuing value, from an investigation of the accountancy procedures of the international oil companies. Furthermore, such an investigation, if it were to be effective, would have to extend to their operations all over the world and it is doubtful if we would have the necessary jurisdiction to enable this to be done.
In any event I am satisfied that so far as our requirements are concerned a better knowledge of international pricing mechanisms rather than accountancy procedures is desirable. A firm of specialists have been engaged to carry out a detailed study of this subject and I expect to receive their report in the near future.
In consideration of an application for an increase in price does the National Prices Commission consider the available supplies that companies have in their possession before granting the increase? Do they consider the stocks already held by the companies?
I am not in a position to speak for the NPC on their precise approach to a matter of such detail but I would not think they do. I believe they look at current costs.
Would the Minister agree that his colleague, the Minister for the Environment, when in Opposition, pointed to the fact that when such companies applied for an increase it was in respect of stocks they had for a long time?
Unhappily, our position at present is that stocks are not as great as one would wish them to be, for obvious reasons.
17.
asked the Minister for Industry, Commerce and Energy if his attention has been drawn to a letter from an oil company (details supplied) requesting their clients to accept an increase of 50 to 60 per cent in the price of home heating oil to ensure delivery and if this increase has the approval of the NPC.
I have seen the letter the Deputy has referred to. I have been advised that the company in question have contracts with the majority of their customers and, as the Deputy is probably aware, contracts between a company and their customers which contain a price variation clause, remain outside the scope of the Prices Acts. I think that it is reasonable to assume that contracts of this kind contain a price variation clause acceptable to both supplier and consumer. Where no contract exists, the company are subject to the provisions of the Maximum Prices (Petroleum Products) Order.
Is the Minister aware that people who cannot afford to avail of this are necessarily deprived now of a supplier because no other supplier of home heating oil will supply them? The company in question will relieve them of their contract but they cannot get another supplier and that is happening to thousands of people.
If the Deputy is concerned about people who are looking for home heating oil I should like to tell him that they will not get it, irrespective of their suppliers.
I am talking about the letter that was received.
Since that letter was sent out the order was made which gives priority to users other than those for home heating. The question of supply will not arise for some time.
Is the Minister suggesting that there will not be any home heating oil in the next 12 months?
I am not so suggesting.
Then surely the Minister should be concerned at the evident patent exploitation of the public? In view of the loophole in the Prices Acts through which people are exploiting the public would the Minister not take steps to deal with this matter? Surely no consumer in signing such a contract would have been conscious or aware of the possibility of a price variation clause leading to a 50 to 60 per cent increase? Has the Minister not a duty to deal with this in the public interest?
This has been the law since 1958 and it was frequently used by suppliers and consumers since then. It is open, as that letter made clear, to consumers who have contracts of this kind which allows this sort of variation, to decline to take further supplies. Some of them have done so.
There is no opportunity for them to enter into contracts with anybody else at present. They are prisoners of the particular company who are exploiting them in the most blatant way and the Minister has a duty to protect people against that exploitation because the price of oil has not gone up by 50 to 60 per cent. That is sheer profiteering and if the Minister was doing his job he would deal with the company no matter what their political affiliations.
The ordinary consumers of small quantities are not affected by this because they do not have contracts of that kind. This concerns larger consumers who have contracts.
Why should they or industry be exploited?
The company, I am so advised, are within the law in contracts of this kind.
Change the law in that case to stop exploitation.
The Deputy should calm down because shouting and banging the table will not reduce the price.
The multi-nationals were the darlings of the Deputy beside Deputy FitzGerald before he came in.
The Minister of State should talk about the company who have been mentioned.
We all know who the affiliations are with.
(Interruptions.)
In respect of the customers for small amounts from Burmah Oil can the Minister do anything to ensure that they can become customers of other oil companies? Those consumers require home heating oil for convents and so on and they cannot afford to pay the high price. In view of the fact that the Minister cannot do anything about the contract can he arrange for alternative suppliers for them?
We have already made arrangements in respect of customers, particularly the commercial customers, of a certain company which had special difficulties. Those arrangements have worked out pretty well. While there was a large volume of complaints up to two weeks ago from customers of that company I understand that no complaints have been received since.
When may these people expect to get home heating oil from alternative suppliers?
In the very short-term I would think that non-priority users of home heating oil will not get supplies. I do not know how long that will be; it may be a month or two. It depends on the ability of the companies to supply the priority users.
When will the Minister be in a position to make a statement about the matter?
I do not know.
Does the Minister regard the quotation by Burmah Oil to the many thousands of domestic heating oil consumers of an increase of 60 per cent—I saw hundreds of letters to that effect—as justified or coming within the ordinary ambit of approval by the National Prices Commission? Will he introduce amending legislation to bring that kind of outrageous increase within the ambit of the NPC?
I regret very much that this company are attempting to impose increases on some of their customers, not their small customers, of this order of magnitude. Under the existing law, which has been the law for 21 years, I am powerless to stop it. I believe that market forces will stop it. I have had a discussion with some executives of that particular company. They told me, as I expected, that they had lost a great deal of business among people to whom they made that sort of offer. They regard it as purely a temporary expedient but they had to buy a couple of shiploads of oil at a very special price in order to try to supply some of their priority people. They will revert as soon as they possibly can to buying oil at normal levels and selling it at normal levels.
Does the 60 per cent increase no longer operate? Do the letters no longer operate?
That question should be addressed to the company not to me.
No. It is the Government who are responsible for price control.
Does the Minister recall that he spent long hours huffing and puffing in the House in relation to the seven-day outer zone agreement and he indicated—it is in his party's manifesto—that it would be abolished. Now we have a situation where the Minister is not only not prepared to do that but is prepared to stand over an increase of 60 per cent.
I am not prepared to stand over an increase of 60 per cent.
The Minister is not prepared to do anything about it.
(Interruptions.)
Order. We are getting into argument now.
In the light of that situation what can a consumer——
The Deputy will not allow me to answer the previous question.
Apparently the Minister has not an answer to it. I will willingly give way if he has any answer. What does a consumer do in that situation?
How in God's name can I answer the Deputy. The Deputy is trying to shout down his two colleagues beside him in case they get in to ask a supplementary, so he will not let me in with the answer.
What does a consumer of Burmah oil do when Texaco and other companies have said in relation to supplies from them that they are sorry, that they are stopping the supply of oil and they cannot supply oil to them for another three months. They are told by those companies that if they wanted to change over to them they could not possibly be supplied with oil. I would like to hear the Minister's answer to that because a lot of consumers are very irate about the matter.
As I tried to point out to the Deputy, who possibly did not hear me between his own further supplementaries and those around him, this company have had to do this, they informed me, in respect of two relatively small shiploads of oil which they had to buy in circumstances of great difficulty for them. They expect shortly to be back in the more normal situation where they will be getting supplies of oil at normal prices from their normal suppliers and then they will be selling at normal prices. The company in their own interests could not continue, for other than a short period of extreme difficulty, at price levels of this kind because they would lose virtually all their customers.
Could the Minister say what was the result of this meeting with the company? Were there any concrete results?
I have informed the Deputy what they told me.
That the letters would be withdrawn?
No. They are likely to have oil available at normal prices soon.
May I ask the Minister a question?
It is now 25 minutes past three and we have had a lot of supplementaries on this one.
I was trying to ask a supplementary earlier. I am afraid it is an oily one but I was told there was further oil down the line. Since we are running out of oil can I ask the supplementary again? Is the Minister aware that this company have recently informed one of their retailers that they will no longer provide him with diesel fuel but at the same time they will not release that retailer from his contract to supply petrol? This ensures that that particular retailer with an offer of a contract from another company cannot accept it. Is the Minister aware that that type of malpractice is in operation so far as this company are concerned?
I imagine that that is a question of legal interpretation of a particular contract. It is a matter on which a garage or a retailer should seek legal advice.
It is a matter for the Fair Trade Commission.
The Fair Trade Commission are just about to conclude an inquiry into the distribution of oil at retail level. They presumably did not include recent events.
Would the Minister ask them to take this matter into account?
18.
asked the Minister for Industry, Commerce and Energy the steps it is proposed to take to ensure that oil and petrol purchased by the oil companies at one price are not held by them until application for price increases are granted thus causing artificial shortages.
The reporting of oil stocks held by the oil companies has been stepped up from monthly to weekly intervals and such reports are being given in much greater detail than heretofore. Moreover, spot checks of stocks held at the oil terminals and elsewhere over the Easter period revealed no discrepancies.
I am satisfied, therefore, that there is little or no opportunity for the oil companies in this country to hold supplies in stock in anticipation of price increases. My concern at the moment is that stocks are at rather low levels and I have asked the oil companies to replenish them.
Is the Minister aware that when stocks are taken out of any oil depot a daily check has been kept in recent years by the ordinary excise staff of the Revenue Commissioners? The full details of existing stocks in depots and daily output is rigorously recorded. All the nonsense the Minister is going on with is rejected by the oil and petrol workers.
The Deputy is making a statement, not asking a question.
Is that the situation?
It is not.
What is the situation?
So far as we know there is no guarantee that a company may not withold supplies until a price application is granted. Can the Minister assure the House that this is not the case?
The stocks which we hold at the moment are less than what would be the normal stocks because of the run on them. I suppose that ideally one should ask the companies to run down their stocks as much as possible before an increase takes place but that is not feasible commercially. It cannot be done. I would be happy enough as long as there were not excessive stocks awaiting a price increase.
The Minister is confusing the question. It is not a question of running down stocks. It is a question of charging a higher price for existing stocks before they are replaced by new stocks. The Minister is deliberately confusing that. We are concerned that no additional price should be charged until the stocks at present there have been exhausted and replaced by new stocks, which is precisely what in opposition the Minister kept pressing on our Government.
The companies' reply to that is that the incoming stocks may cost more and it may simply not be possible to replace them on an equal basis.
(Interruptions.)
19.
asked the Minister for Industry, Commerce and Energy if the rise in oil prices will be maintained throughout the year and if he is satisfied that the oil companies request for price increases are solely from price increases in world market.
It is not possible, at the present time, to indicate what further, if any, increases in oil prices may be implemented during 1979. This would be dependent on a number of factors including any further decisions by OPEC as regards oil price movements during 1979. All price increase applications from the Irish oil companies will be examined by the National Prices Commission and my concern will be to ensure that the Irish consumer does not have to pay more for oil products than is necessary to ensure continuity of oil supplies.
With regard to the second part of the Deputy's question, I am satisfied that any price increases implemented by the oil companies were warranted on the basis of increased crude oil and product costs.
May I ask a supplementary on Question No. 18?
The Deputy should resume his seat while the Minister is speaking. It is only an ordinary courtesy in the House and it is not too difficult to follow that.
(Interruptions.)
I have endeavoured several times to ask a supplementary on Question No. 18.
This is the eight supplementary on this question.
The Deputy may ask one supplementary on Question No. 18.
What facilities are available to the Minister to determine the amount of oil held in any particular depot in the country on any given day of the week? If that information is available to him by what means is it available to him and if so why express surprise three weeks ago when he discovered the amount of oil held at Whitegate?
Because the amount of oil held at Whitegate was rather larger than I or my officials had anticipated it would be.
What is the source of the Minister's information?
We have had a lot of matters raised since we started on the first of those questions.
(Interruptions.)
To whom is the Deputy referring?
The impression was created that the figures were being concealed and that only your detective work disclosed it.
The remaining questions will appear on tomorrow's Order Paper.