andMr. Manning asked the Minister for Industry and Energy the functions and purposes of the Irish National Petroleum Corporation; whether he is satisfied that the corporation has fulfilled these functions and purposes; whether it is the function of the Irish National Petroleum Corporation to make a contribution to the efficiency and competitiveness of the oil supply industry in this country to the benefit of consumers; and, if so, if he is satisfied that the corporation is fulfilling this function.
Written Answers. - Irish National Petroleum Corporation.
717.
The detailed objectives of the Irish National Petroleum Corporation Limited are set out in the corporation's memorandum of association available in the Companies Registration Office. The working objectives are contained in the recent annual reports of the corporation which are available in the Library of the House. I am, however, arranging to circulate a copy of the latter in the Official Report. It will be noted that these objectives embrace a function on the lines specified in the Deputies' question.
The scope of the corporation's original functions was very substantially changed when, following Government decisions in 1982 to acquire the Whitegate refinery, the corporation was entrusted with the operation of the refinery.
While the success of a body like the INPC should be assessed against the totality of its approved objectives, I regard the impact of the corporation's activities on the efficiency and competitiveness of the oil industry here as a crucial aspect. This is a matter which must weigh very significantly in the Government's review of future policy on the corporation and its operations.
The Deputies will appreciate that it would not be appropriate for me, at this stage, to express views other than as an input to consideration of the matter by the Government in due course.
Objectives of the Corporation
1. To provide for the supply of a significant part of the oil requirements of the Irish market on terms which are as secure as possible in duration and continuity and in accordance with policies approved by the Minister for Industry and Energy.
2. To operate within the Irish oil industry and market in a manner which will promote orderly development, bearing in mind objective No. 1 above, the national situation and other commercial interests involved.
3. To develop and maintain an economic operation which contributes to the efficiency of the oil industry in Ireland.
4. To carry out duties as designated by the Minister for Industry and Energy in relation to the development of indigenous hydrocarbon resources, including functions arising from the State's participation rights provided for in petroleum exploration licences.
5. To afford professional advice and assistance and to undertake specific functions and operations on behalf of the Minister for Industry and Energy in relation to the provision, transportation, refining and storage of petroleum and to all oil industry matters.
6. To maintain a continuous review of international supply trends and keep the Minister for Industry and Energy advised of important developments.
7. To promote the use and development of Irish natural resources and to promote an enhanced trading value for Irish exports where possible.
718.
andMr. Manning asked the Minister for Industry and Energy (a) the quantities of fuel oil which the ESB were obliged to purchase from the Irish National Petroleum Corporation in 1982 at prices above the prevailing market price; (b) the cost to the ESB of this differential; (c) the extra cost on the price of electricity as a result of this differential; and (d) the amount of such oil actually delivered to the ESB.
In 1981 the Electricity Supply Board entered into a contract with the Irish National Petroleum Corporation for the supply in 1982 of 250,000 tonnes of heavy fuel oil representing about one-third of the board's fuel oil requirements in 1982. Between January and April 1982, 81,000 tonnes were sold and delivered to the board under an agreed contract at an average price of $206.7 per tonne. In August 1982 the Government decided that the board should purchase by the end of the year the balance of the contracted quantity, that is, 169,000 tonnes, at a crude-related price of $195 per tonne. The board received delivery of 20,000 tonnes of this quantity. With the changed situation in the fuel oil market and in agreement with the Department, the board and the corporation arranged that the latter would sell 140,000 tonnes on behalf of the former on the open market and the board would pay the corporation the difference between the sales price and the crude-related price. This difference averaged $20.3 per tonne. Because of the existence of premia related to suitability of the material for further processing and low sulphur content this arrangement was beneficial both to the corporation and the board.
The price of the board's other supplies of heavy fuel oil in the year averaged $169 per tonne. The extra cost to the board of the purchases from the corporation amounted to about £4.8 million. It must be stated that in 1982 the corporation's contracted crude oil supplies were uncompetitive when compared to other crude oil prices. As a result of major changes in the INPC's procurement arrangements made earlier this year, the corresponding figure in 1983 is expected to show a significant improvement.
The extra cost of the price of electricity as a result of the board's purchases from the corporation in 1982 would be equivalent to just under one per cent of the price of electricity.
Question No. 719 withdrawn.