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Dáil Éireann debate -
Thursday, 18 May 1989

Vol. 390 No. 3

Ceisteanna—Questions. Oral Answers. - Gas Pricing.

10.

asked the Minister for Energy whether he has carried out any study of the structure of gas pricing in Ireland; and if he will make a statement on the matter.

Natural gas pricing is monitored by my Department. Gas prices in Ireland, in line with other European countries, are also periodically surveyed by the European Commission and other international agencies. Moreover, I am empowered, under section 11 of the Gas Act, 1976, to issue directives of a general nature on pricing policy, with the consent of the Minister for Finance. In the circumstances I do not consider a formal study of the structure of gas prices in Ireland to be necessary.

May I ask the Minister why there is such an enormous contrast between the £1.32 per therm which small users in Dublin pay and the cost of 15p per therm industrial users pay? It would seem that that enormous gap would take some explanation particularly in view of the fact that the Dublin low user is paying 50 per cent more than his EC counterpart.

There are certain aspects of this matter which are not easy to deal with and I do not think that the trotting out of EC averages in this context is very helpful. So far as the EC is concerned, as the Deputy knows, on average we are below it in some cases and slightly over in other cases. The problems in regard to the smaller consumer relate to the usage of the gas. If we could succeed in getting a higher proportion of this trade it would seem that the case for a reduction would be all the more meritorious. The Gas Board have been seeking ways and means of trying to improve their position with regard to that premium market.

Nevertheless, does the Minister not agree that it is disturbing that other countries have succeeded in supplying gas to the low volume consumer at dramatically lower prices than we have been able to?

The Deputy continually surprises me in regard to this area. When we make comparisons with the EC it would be nice if we were like the UK, where there is a massive network and a number of wells which project a secure source of supply for a very long time.

We have cheaper gas than the UK.

We are just developing the infrastructure and much effort has been put in during the past few years to try to expand the network and corner the market. That has to be given some time to develop. We are not comparable with many other countries in the way the Deputy seems to suggest.

Having said that, there is room for improvement in the pricing area to the small consumer and I would welcome the possibility of being able to do more in that area but it is fairly closely related to the potential development of that market. In relation to the larger consumer, the price is directly related to the cost of fuel which is being displaced by the use of gas. We are into a totally competitive position there and any adjustment upwards to compensate for what would appear to be happening at other levels would lose you that transaction.

Is the small consumer subsidising the major industrial consumer?

May I ask the Minister if he is pursuing any strategy with the Minister for the Environment, particularly, in relation to the environmental aspect of fuels generally? Given that the Air Pollution Act is in place, smokeless zones have been designated in various parts of Dublin, that natural gas produces no smoke at all and that, as we know, domestic coal fires are responsible for about 80 per cent of all smoke pollution here, would the Minister not agree it is highly desirable that greater encouragement be given to domestic consumers to take up natural gas? Would the Minister not further agree, if he accepts that, that the way to do this and bring it about is to have a tariff structure and pricing system which would encourage greater use of natural gas by the domestic sector? Is there any formal strategy being pursued by the Minister or his colleague, the Minister for the Environment, in relation to this?

I suppose it would not be normal to disclose the discussions I have from time to time with all of my colleagues——

We are trying to reduce pollution.

——but naturally we are concerned to ensure that the best possible use is made of this national natural resource which is so environmentally friendly in the context of the present environmental problems. There are commercial aspects to this matter as well and the Gas Board, in the light of their current financial situation and the infrastructure which has to be developed have to operate on the basis of good management and commercial practices. We are doing all we can within these constraints to enhance that market and I have taken every opportunity available to me both inside and outside this House to emphasise the value of this developing energy infrastructure. If there are other suggestions I can take on board to enhance this I would be very glad to hear them.

I accept that there are commercial considerations involved but what I am really asking the Minister is whether he would not accept also that there are very major environmental and public health factors involved and that this matter should be given very serious consideration when gas pricing is being taken into account? It is the ideal solution to this major problem which exists in Dublin in particular and it should be pursued vigorously and a price structure arrived at whereby there would be a greater uptake of natural gas by domestic consumers.

I have no argument with the general thrust of that.

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