This report indicates that the Commission through its various Directives have influenced countries to maintain reserve stocks of crude oil and petroleum products amounting to at least 90 times their average daily internal consumption, and that there is an exemption of 15 per cent from this stocking obligation as regards derivatives of crude oil consumed by the producer Member States. At the moment the oil stocks held by oil importers are at a level corresponding to at least 80 days' average daily internal consumption. As a contingency stock equivalent to 10 days' supply, is held at Whiddy Island, the total stock on hands at all times is therefore equivalent to at least 90 days' supply. The growth in the production of crude oil found within the Community has led the Commission to propose a modification to the 1968 directive. That directive provides for an exemption of up to 15 per cent from the stocking obligation as regards derivatives of indigenous crude oil consumed by the producer Member State. The exemption limit would now be increased to a maximum of 40 per cent. Moreover, the proposed 40 per cent exemption would apply not only in those Member States with indigenous oil production but also in Member States which consume derivatives of crude oil produced in other Member States. For Ireland this would mean that the maximum exemption could result in the 90 days' reserve obligations being reduced to 54 days. Our view is that if adequate guarantees are forthcoming regarding supplies the proposed directive could be accepted.
We pointed out in the report that the cost of holding obligatory stocks falls at present on the oil companies and the large oil consumers, so that if a reduction in stocks took place a reduction in the cost of holding stocks should follow. We hope that this would be passed on to the consumer. We will watch that carefully in the event of a reduction of stocks.
In relation to how the offset should be apportioned between those obliged to hold stocks we felt that it was open to the oil companies and the large consumers to pursue the matter with the Minister for Industry, Commerce and Energy.
I acknowledge all the help we received from the various oil companies in coming to those conclusions.
I recommend the report for adoption.
