asked the Minister for Industry and Commerce the way in which Irish prices, excluding taxes, compare with the European average, at the most recent date for which he has statistics, in respect of (i) premium petrol, (ii) regular petrol, (iii) motor diesel and (iv) residual fuel oil; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Fuel Prices.
9.
The information sought by the Deputy is set out in the weekly Oil Bulletin published by the European Commission. However, that bulletin itself points out that comparisons between prices and price trends in different countries require care and are of limited validity. In particular, the prices quoted for other States tend to be those applying in main urban centres whereas the Irish prices apply nationally. Moreover, it is not clear that Irish prices for gas and fuel oil reflect rebates and discounts available in the market which can vary from time to time.
The extent to which Irish pre-tax prices exceed the European average has been reduced significantly since July last when I acted to reduce Irish prices to a more reasonable level.
The Deputy will be aware that Irish prices have exceeded European average prices for a long period of time and there are reasons why this has been so. Irish prices are based on the mean-Platts quotations for north-west Europe with additional elements in respect of Whitegate and costs arising from the structure of the Irish market, involving a significant number of stations with a relatively small throughput, with particular distribution and retail costs and margins related to this.
Does the Minister not agree that the findings in the EC price bulletin were sustained by the independent work of the National Prices Commission when they examined this issue? Will he not agree that the Minister's reduction of 10p in the price of petrol last July in fact involved 2p of taxpayers' money in reduced tax, 6p in the ending of promotional gifts in most cases and only reduced the margin taken by the companies by about 2p? Will the Minister accept that the present position of having 30 per cent higher tax excluded prices for petrol here is not acceptable?
I should like to tell the Deputy that an amount of work in this area has been undertaken. The Deputy referred to the consultancy commissioned in 1983 by the National Prices Commission and he will know from his time in this office that that identified certain uneconomic factors which pertained to the Irish market and necessitated an upward adjustment of prices obtaining in the six major EC markets. The Deputy is correct in stating that that identified certain areas relating to distribution factors and so on.
That is not a reply to the question I asked. May I repeat my question?
The Minister has not concluded his reply to the Deputy's question.
The Deputy is aware of the contents of the report of the National Prices Commission which deals with a whole range of what they call uneconomic factors that pertain to the Irish market.
It deals with the point of deviation.
Among a number of other things. The Minister's decision in July to reduce the price of premium grade by 10p per gallon did, as the Deputy will appreciate, close the gap between ourselves and the European average. In fact, in the case of premium petrol the gap was of the order of 34 per cent before that decision and the Minister's decision reduced the gap to about 24 per cent. In regard to the Deputy's question about the breakdown of the savings involved in the 10p reduction, I should like to tell him that we are making every effort to bring Irish prices closer to European prices. We improved the position considerably by the Minister's announcement in July and we will continue to make every effort to close the gap.
Will the Minister agree that the petrol distributing companies were able to live within a 3 per cent deviation from EC prices in the early eighties and that the National Prices Commission in their investigation sustained that that was a viable position? Will the Minister agree that the way to tackle this problem is by a link to EC prices instead of involving his Department in the bureaucratic examination of price movements on a monthly basis?
Perhaps that is the way it could be undertaken. I am aware of the Deputy's good work in that regard while on this side of the House and I will have a close look to see if it will be practical to adopt his suggestion. Nothing would please us more than to be able to link the price to one that does not involve Departments having to crawl all over it. That would be the easy thing for us to do. However, the Deputy will be aware that in the report of the National Prices Commission a whole range of factors are listed such as freight costs, different retailing structures, the Whitegate factor, smaller loads and drop sizes and so on. We will have to look at those issues.