Vol. 455 No. 8
390 Mr. S. Brennan asked the Minister for Transport, Energy and Communications the proposals, if any, he has in regard to the usage of the oil levy and its allocation within the newly formed oil reserve agency and if he will make a statement on the matter. [13080/95]
Under the European Communities (Minimum Stocks of Petroleum Oils) Regulations, 1995 (S.I. No. 96 of 1995), the National Oil Reserves Agency was established with effect from 1 June 1995. The agency has the statutory duty of ensuring that national oil reserves are at a level equivalent to at least 90 days consumption. Ireland is required by EU Directives and the rules of the International Energy Agency to maintain stocks of oil at this level.
The regulations also provide for the collection of a levy on oil consumption in order to finance the activities of the agency which is required to operate on a break-even basis. The amount of the levy is determined by the Minister for Transport, Energy and Communications and has been initially set at 0.375 pence per litre which is equivalent to 1.7 pence per gallon. It is estimated that the levy will yield revenue of between £15 million and £16 million in a full year which is equivalent to the initial estimate of the expenditure of the agency.
As the agency does not own oil stocks at present, its costs arise mainly from contract payments in respect of the holding of oil stocks both within and outside the State. The purpose of such contracts is to ensure the availability of oil stocks in the event of a supply shortage. Some costs will also arise in respect of necessary infrastructural improvements at the Whiddy Island Oil Terminal aimed at bringing the terminal back into commission and restoring its strategic value as a crucial element in our emergency response capability.
