asked the Minister for Energy the present role and objective of the INPC; if he has satisfied himself that the present compulsory offtake requirement is not creating a high cost environment for petrol and oil products on the Irish market; if he is at present considering any proposals for a joint venture involving the Whitegate refinery and the Whiddy storage facilities, County Cork; and if he will make a statement on the matter.
Ceisteanna — Questions. Oral Answers. - Role of INPC.
51.
The main objective of the INPC has not changed since its inception — it is to provide for the supply of a significant part of the oil requirements of the Irish market on secure terms.
The regulation whereby importing oil companies are obliged to purchase up to 35 per cent of their petrol and gas oil requirements from the INPC was introduced as a result of a failure to reach agreement between the Minister for Energy and the oil marketing companies on the basis under which refined product from the Whitegate refinery would be sold.
In the light of Whitegate's operations since 1982 and given the characteristics and performance of the Irish petroleum products distribution sector over the same period, I am satisfied that the offtake regime, of itself, does not create a high cost environment for petrol and oil products in the economy.
As I have indicated in reply to other questions on today's Order Paper, discussions are proceeding with other parties in relation to both the Whitegate refinery and the Whiddy terminal. However, I am not, at this stage, in receipt of any definitive proposals relating to the facilities.
Would the Minister accept that the acid test for a company like Whitegate Oil Refinery is that it will function on the basis of reducing costs to the consumer? If its operations are adding cost to the consumer, its continuing operation must seriously be questioned. The Minister in the course of his reply mentioned security of supply. Does he agree that refining capacity does not necessarily enhance one's security of supply? I cannot think of a situation where one would have an abundant supply of crude oil and a shortage of refined oil. On the basis of security of supply, I ask the Minister to consider the answer he has given me. It is not relevant that one should have a refining capacity on that basis.
In relation to the compulsory offtake, the company are allowed to pass on their costs to the consumer. This consequently establishes a price for petrol and oil products on the Irish market which need not necessarily conform to the conditions on the world market. It has been reliably established on many occasions——
I did ask for brevity in respect of supplementary questions. I still have some questions to dispose of within the prescribed time and I must be fair to other Deputies.
Of course, a Cheann Comhairle. That has led to a situation where there is a high cost environment created by the operations of the INPC.
No, I do not accept that at all. The objectives of the INPC provide for the supply of a significant part of the oil requirement of the Irish market on terms which are as secure as possible in duration and continuity and in accordance with the policies approved by the Minister for Energy of the day and to operate within the Irish oil industry and market in a manner which will promote orderly development bearing in mind the national situation and other commercial interests involved. I do not accept that the impact of Whitegate on the price is large. I believe the breakdown of the figure will show that it is about 1.1 per cent of the overall cost of premium petrol, about 1.1 per cent of derv and 1.9 per cent of gas oil. That is the breakdown in pence per litre. That is a percentage of the Whitegate element of it. Whitegate and the INPC are providing us with the security of supply which is very important from our point of view.