asked the Minister for Industry and Commerce if, in view of the fact that Irish petrol retailers are reported to take a profit margin per gallon of around double the profit rate retained by retailers in Great Britain, he will take any measures to reduce this profit margin and lower the price of petrol to motorists; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Petrol Profit Margin.
3.
As I have no function in regard to the profit margins enjoyed by petrol retailers in Great Britain, I am not in a position to comment on them. However, I can say that margins here have to take account of market structures, retail distribution factors, low throughputs in some areas and exchange rates, etc. I do not envisage taking any measures to control retailers' margins at the present time.
Does the Minister regard it as reasonable that the margin of profit for petrol retailers here is double the margin of profit for petrol retailers in Britain? In Irish pence terms, the margin here is 18p while the margin in Britain is 9p. Can the Minister tell us whether he has any intention to restrict the margin so as to ensure the Irish motorists get a better deal?
Undoubtedly, the margins in Ireland are higher for this reason. In some stations which have a 400,000 gallon to 500,000 gallon throughput, one could legitimately say that the margin is a bit high. On the other hand, when one looks at the distribution structure nationwide, one finds that many small petrol retailers have to engage in other activities in an endeavour to eke out a living for themselves. That is the reality of the position as we find it. The Deputy will appreciate that it is not that easy a problem to identify although he will recall that I took 10p a gallon off the multinational oil companies in July last to reinstate some balance in the overall position. Most of the larger petrol stations are owned by the companies themselves.
Would the Minister agree that one of the reasons the price of petrol at retail outlets here is so high is the feature of gifts given by the companies and the fact that they do not pay VAT on a product they give free, as a gift, this being a more attractive way in which to operate than by means of offering petrol at a lower price? Would the Minister agree that it is time this whole area was examined with a view to the reduction of the retail price of petrol here? Would he agree that one possible way of ensuring such a reduction would be by compelling companies to pay VAT on those gifts?
I am aware of what the Deputy has said and I brought that matter to the notice of the Minister for Finance previously. It is not an area in respect of which I have any direct function or can take specific action. In regard to the gifts themselves, I should say that some companies ceased this practice when there was a mandatory price reduction of 10p in July last while others continued to give out such gifts. That proved the point that there was a margin there. We are keeping a watchful eye on the position. Since then, in some regions, individual retailers — although representing different companies — have come together to abolish the gift practice. To a large extent the gifts being offered are not of Irish manufacture and, therefore, are not of great benefit to our economy. Equally they can affect certain elements of Irish business.
I know it is a difficult area to monitor because there are such serious abuses taking place. Would the Minister say whether he has in place any system of monitoring to ascertain precisely what is happening. Is the Minister aware that in Dublin city there are two garages of the same name, two Esso garages, with a margin of 1.4p per litre difference in the price of their petrol and that none of the petrol stations has the price per gallon, or even per litre, displayed in a clearly visible manner? I understood at one stage that retailers must display the price of their petrol in a visual manner. Is this being monitored by the Minister to ensure that people know the price per gallon or litre before putting £10 worth in their tanks?
It is a requirement and it is being monitored by me. Nobody keeps a more watchful eye on them than I. I can assure the Deputy that any requisite action will be taken by me in an endeavour to gain more benefit for the consumer.
Have there been any prosecutions for non-display?
That is a different question and I do not have the information available to me here.
It is a separate question. I am calling Question No. 4.