asked the Minister for Industry, Trade, Commerce and Tourism the steps he will take to give the Irish consumer the benefit of current exchange rate fluctuations in so far as the purchase of petrol is concerned.
16.
Ceisteanna—Questions. Oral Answers. - Petrol Prices.
15.
asked the Minister for Industry, Trade, Commerce and Tourism when he will introduce an equitable system of pricing for petrol and petrol products, based on a satisfactory purchasing, storage and currency policy.
I propose to take Questions Nos. 15 and 16 together.
Price control on petroleum products is currently, and has been for many years, exercised in an equitable manner. In the exercise of this control I am advised by the National Prices Commission which keeps under continuous review the movements in all the cost factors affecting petroleum product prices and publishes from time to time in their monthly reports details of their recommendations.
One of the main cost factors affecting petroleum product prices over the past years has been the movement of the Irish pound relative to the US dollar and the Irish consumer has consistently been given the benefit of these exchange rate movements in so far as the purchase price of petrol is concerned. In the price adjustment made in early January 1984 an exchange rate of $1.14 to the Irish pound was adopted and this compared with an actual daily average rate of $1.1399 for the quarter ended 31 March 1984. In mid-March 1984 the oil companies reduced petrol prices by amounts averaging 6.9p per gallon, excluding VAT, to reflect the then improved rate of $1.18 to the Irish pound and while slightly over half of this reduction has recently been reinstated, the present selling prices of petrol are not in excess of those warranted on the basis of current exchange rates.
The Deputy will be aware that the nature of the oil industry has changed considerably over the years and, to reflect this, changes have been made from time to time in the arrangements for administering price control. The commission has very recently completed a review of the present price control system and I am at present considering a number of recommendations which they have made for changes in the system.
We are all happy to hear that the review has at last arrived on the Minister's desk. Can the Minister give us an approximate date when we can expect the recommendations to be acted upon? Would he agree that the general public have been confused for some time by price increases and decreases which are announced with great solemnity by the Minister when they are decreases, but with much less noise when they are increases? Would the Minister agree that there is confusion in the minds of the consumers concerning the whole question of the pricing of petrol and petrol products?
In reply to the first part of the Deputy's question, within about three weeks. On the second part of the Deputy's question I have to say that I made announcements about reductions and increases——
Loudly and quietly.
It is a matter for the media to decide on the degree of prominence they give to either.
I believe this question has a very great bearing on the whole issue of the pricing structure. Would the Minister indicate what new purchasing arrangements he and his Department have entered into with the supplying countries on the question of contracts for the supply of petroleum products? Will he consider the use of Bantry Bay as a national storage depot which would guarantee price stability for a considerable period of time?
That is a separate question.
Question No. 16 refers to purchasing and storage.
The actual purchase of oil by or on behalf of the State and its storage are matters for the Department of Energy, not for me. Price control matters are dealt with in the recommendations made to me by the National Prices Commission upon which I expect to be making decisions within about three weeks.
On Question No. 15, given the fact that he may not reply in the affirmitive to the next question on the Order Paper and decontrol the price of petrol altogether, if price control is to continue, would the Minister consider it desirable to provide for automatic changes in the price of petrol on a monthly basis to allow for currency fluctuations?
I think I would.
A well planted question.
That suggestion is outrageous and untrue.
It is true. That is why the Deputy is jumping in.
It is not true. That is an unfair statement.
Order, please.
On a point of order, we made that recommendation in the form of a question when one of the Deputy's colleagues was Minister.
That is not a point of order.
17.
andMr. Molony asked the Minister for Industry, Trade, Commerce and Tourism whether he believes that the present system of loading petrol prices with a disproportionate share of the cost of crude oil is satisfactory; and if he will make a statement on the matter.
The practice referred to by the Deputies was followed some years ago with the objective of shielding industry from the full effects of rising oil prices. In revisions made to the maximum prices orders since 1982, the opportunity was taken to reduce gradually the element of loading on petrol prices which had been built up over a period and current selling prices for petrol do not include any significant element of loading.
Is the Minister aware that at least one of the major oil companies operating in Ireland made strong recommendations to the National Prices Commission that this practice should be discontinued because it is regarded as inefficient?
This matter is dealt with in the recommendations of the National Prices Commission. I will be deciding on it in the near future.
Is there any reason why these two Deputies should have put their names to all these questions like Mickey Mouse?
Like Tom and Jerry.
In the absence of a proper Opposition, questions have to come from somewhere.
There is some doubt as to whether Mickey Mouse is a parliamentary creature.
He has featured here on more than one occasion.
A Cheann Comhairle, you will have to rule on that.
18.
andMr. Molony asked the Minister for Industry, Trade, Commerce and Tourism if he will consider decontrolling the price of petrol.
During the course of their review of the price control system applied to petroleum products the National Prices Commission considered the question of decontrol of petrol prices and recommended against decontrol at this time. I am currently considering their recommendations on this matter.
Does the Minister not believe that the argument in favour of decontrol for a limited experimental period would be worth trying?
In their study the National Prices Commission gave their advice on the subject. While they would recommend substantial modifications in the existing system, which I think they consider to be inflexible in a number of respects, they do not recommend the implementation of decontrol. I have indicated that I will be considering that matter very closely within the next few weeks. I have not come to a final decision on the subject.
Would the Minister agree that if he brought in decontrol of petrol prices this would have a most detrimental effect on industry, unit costs of production and all transport costs in the west and would be a death blow to all kinds of development there?
Obviously considerations of that kind are ones which I will have to bear in mind. I will not risk the censure of the Chair by answering at undue length.
It would be better if the Minister could avoid that.
When the Minister has a chance to examine the report he has on his desk, he might consider introducing a form of decontrol while making allowance for the concern expressed by Deputy Flynn. It would be quite possible to introduce decontrol which would remove the administrative costs on management and on Government which the present price control regime insist on and remove the distortions in the market and the inefficient allocation of resources within the industry. Apart from the reason about which Deputy Flynn expressed concern, there are a number of other reasons. If that is the Minister's concern he could consider a form of decontrol——
That is a long question.
I want to highlight the distinction between what Deputy Flynn is complaining about which is just one small point in a major question——
A debate on an Estimate would be a more appropriate time to do that.
If I were considering decontrol I would obviously have to give due weight to the point made by Deputy Flynn about the effect it might have on the price in isolated and relatively uneconomic stations which might be made to bear a higher price than they are bearing at present in the managed market situation.
Including transport costs.