Deputy Sylvester Barrett has given me notice that he wishes to raise on the Adjournment the matter of the proposed increase in oil prices.
Committee on Finance. - Adjournment Debate: Oil Prices.
During the energy debate in the last session and again during the recent economic debate I put a number of questions to the Ministers concerned and I made a number of suggestions and proposals. During the recent economic debate I did not receive any answers to the questions I put, which I understand the Minister for Industry and Commerce said would merit consideration. During that debate in December I also indicated I was aware of an Opposition's responsibility and I might say that I now have no wish to rock the national boat any more than I had then.
However, events since then have more or less caught up with us all, and the time seems to have come now when the Government must tell the House and the people what is happening and end the confusion that has been part of this oil crisis. In fact you could liken the Government to the boy on the burning deck that Hal Roach speaks about and who is completely oblivious of everything going on around him.
One of the suggestions I made at that time was with regard to increasing our storage capacity. I do not know of any action that has been taken in this matter since that time. If any action has been taken, we have not been told about it. Surely the immediate problem should be tackled by erecting more storage. I put down questions to the Minister for written answer today. One question was to ask the Minister for Transport and Power the total storage capacity in the Whitegate Oil Refinery. The reply to that is 356,000 tons. Another question was to ask the Minister for Transport and Power the total storage capacity for oil products in Dublin, excluding that used by the ESB and the Gas Company, and the answer was 250,000 tons. That gives us a total storage capacity of 606,000 tons. I would like to know from the Minister if this total tonnage has been used to the fullest capacity and what is the position in regard to the amount of oil in storage.
As I have said, we have nothing but confusion. The people now have to meet the price increases which have taken place in Britain and which I understand have been applied for here by the oil companies. Seven days' notice is all that is required now in what is known as the British outer zone, but up to 5th December last oil companies in this country, like all other companies who proposed to increase prices, had to go before the Prices Commission, and I understand that two months' notice had to be given. On 5th December last, for some reason or other, this whole system was dismantled and all that is required is that the major oil companies give seven days' notice of their intention to raise prices. They are not seeking permission but merely notifying the Minister for Industry and Commerce that they are going to increase the price by whatever amount is in question.
We would like to know why this system was dismantled on 5th December last. There must have been some good reason for the Government taking this action. If the major or the multi-national oil companies hold a big stick over our Government we would like to know about it, and if they got away with it, wrongly, we would also like to know about it.
The oil companies are now seeking 8p a gallon on petrol, from next week, 5½p on heating oil and 7p or 7½p on diesel. The big question is: where does this extra money go? Admittedly the Arab countries have increased their prices twice. They also increased them around 31st December. Naturally the companies would be entitled to an increase. However, in the energy debate in December we were told that there were 35 to 40 days' reserves of all descriptions of oil in storage in this country. Will these price increases be applied to what is already in storage? Thirty five days or five weeks brings us back to around the beginning of January. I issued a statement to the Press and warned against this. The head of one of the major companies took me up on this and said I must have been writing with a gold-plated pen. I can assure him I write with an ordinary biro, whatever he writes with. He said there was no foundation whatever for this. He also said that the crude oil from the oil-producing countries to which the increases on 31st December applied is only now trickling through to here. Therefore the increases they are now seeking should only apply to what is imported from now on, according to that statement; it should not apply to what is in storage.
We sincerely hope the Government or the Minister for Industry and Commerce will take some action to prevent these vast increases being applied to whatever is already in storage. If we take the previous figure mentioned—and it was the Minister for Industry and Commerce who said this was in storage—of 350,000 tons and if we were to apply only 6p a gallon across the board, it comes to something in the region of £5,250,000. That is the kind of money that people will have to pay, and pay to whom? It will not go in the form of taxation to the Government.
The Arab people should not be made the scapegoats of this whole energy crisis. Far from it. They were treated far too badly by many of these multinational oil companies for many years. We believe that the profits of these multi-nationals are way up this year, and it would be totally wrong and unjust if these people were allowed to continue on these lines at the expense of the Irish people and the Irish consumer market. Therefore it is of the greatest importance that the exact position be spelled out, and even if the Government or the Minister for Industry and Commerce permits as he must permit under the present system, these price increases at the end of seven days, he should ensure that they do not take effect for at least four to five weeks from now so that what is already in storage will not be affected by this increase.
I have already made suggestions as to what might be done to ease the situation. Again, I emphasise that in my opinion the importance of increasing our storage has first priority. Apart from being able to buy oil before it goes up, as it has been going, storage could also be used in another way. Signs of the oil crisis were evident last summer to many people and I am sure were evident to the Government long before they hit us. By erecting more storage and keeping it filled to capacity we could, if we had done this some months before Christmas—and it is not impossible to erect the tanks which I think can be quickly erected if the oil companies co-operate with the Government—utilise part of what had been in storage now when prices are high. When, in all probability, demand and prices ease in the summer months we could replenish our stocks. Proper storage capacity could serve as a buffer to level out prices in the present period if the problem had been tackled in time. Stocks could be replenished in the summer when demand will be less and when, probably, some of the oil-producing countries will be selling it at a lower price than at present.
There is another fact that has come to light regarding how the Government handled the crisis. We know about the energy conference now going on in America and how consumer countries have been invited to attend in an attempt to counteract the increases imposed by oil producing countries. We learn from the Press that we were not even invited to this conference and that our Foreign Minister is representing us there as an observer. Why is it the foreign Minister? Why is it not the man in the gap, the Minister for Transport and Power, who should be au fait with all these matters pertaining to oil and whose job it is?
The present Minister is not responsible. The question is raised with the Minister for Industry and Commerce.
I am asking the Government why is there not a person properly qualified, or the Minister responsible, representing us at the oil conference? We also learn from the Press that the Minister for Foreign Affairs is accompanied by an official from his own Department and another from the Department of Finance but there is no official from the Department of Transport and Power. It is all-important to have a top official from that Department present at any oil conference because it is that Department's job to sort out the confusion of the energy crisis in which we now find ourselves. That is the Department in which this special oil committee was set up to try to find a solution to the problem. It is totally wrong that they are not represented there.
As regards the long term solution, we must aim at building our own refining capacity. At present we use approximately 5 million tons of oil. We can only refine 2½ million tons of crude oil. We are completely dependent on a surplus from the British oil refineries for the other 2½ million tons. We should take the necessary steps immediately to build further oil refineries so as to provide for our own needs. We should also take the necessary steps to ensure a proper source of crude oil for ourselves. What action has been taken in diplomatic circles with some of the Arab oil producing countries in the past months? Has any been taken? The French, British and West Germans, our colleagues in the Common Market, have all taken action and sought out sources of their own and made diplomatic contacts. We should at least have tried to do something. They are bartering armaments; Britain is bartering something else, but we also have something we could consider, perhaps not a very big thing. Last week the Minister for Industry and Commerce referred to some of my suggestions as small but I think this is important. We have dairy products in which we have dealt before with the Arab people. We could concentrate in this field. Even if they do not eat meat they use dairy products. This is only another suggestion.
We demand an investigation into the prices at present proposed or applied for by the oil companies. The whole structure, as it now stands, should be investigated because of the dismantling of the price structure which existed up to 5th December last. We also want to know if the new prices will apply to what is already in storage and, if so, where the profits will go. If you apply 6p per gallon across the board these profits are quite significant. If these profits are being made, our people have a right to know about them and a right to expect that this would not happen at their expense.
There are a few minutes left in which to add my voice to what the shadow Minister for Transport and Power has said. I would have expected the Minister for Transport and Power to attend for this debate because it very much concerns the mishandling of the whole energy crisis.
He is in the House and knows exactly what is going on.
I do not doubt the Deputy. It is true that the public regard us as throwing up our hands in horror and running before this crisis as before a rising tide. We seem helpless and hopeless and have attempted to do nothing about it. Further, the public were denied any reliable information. Earlier today the Minister said we were calling for rationing. Certainly, if the crisis had been what we were told it was earlier, rationing should have been introduced immediately because people, those who could afford to do so, were storing oil they did not need, and actually depleted stocks as a result when they had been told a panic situation had been reached. There was no rationing. We now know from the reply the Minister for Transport and Power gave myself and Deputy Moore in the House last week that we brought in more oil during these three panic months of chaos when we had traffic held up outside petrol stations than in the three corresponding months in the previous year.
Nobody told us what amount of oil we had at any given time, what we might get in, or how much we were capable of storing but the denouement came when price increases were accepted ad lib.
I intervene to tell the Deputy the time is almost up.
Then we were told that we had adequate supplies. Let the prices run as high as they may, there will be plenty of oil so long as it is dear enough.
The descriptions of the actions of the Government as helpless, hopeless and throwing up their hands, the sort of emotive phrases Deputy Brennan has just been using, are first, ridiculously wrong and secondly, profoundly unhelpful and systematically fishing in troubled waters in a way that Deputy Barrett had the sense not to do. It was destructive as, indeed, Deputy Brennan was a week ago. This is not surprising. We are becoming accustomed to it now.
Who destroyed the economy for the last couple of years?
Order please.
I want to talk about prices. The two speakers have rambled over a whole set of areas partly the responsibility of the Minister for Transport and Power and partly mine. The kernel of the question is the matter of price rises. I am asked first, with great innuendos, who wielded the big stick, why we changed the system of price control on oil and on petrol on 5th December last, the suggestion being that people are not told things. If Deputy Barrett or others had been willing to study the appropriate National Prices Commission Report they would have seen the matter set out and discussed. The National Prices Commission was set up by the previous Government. Its composition is unchanged. It is very representative. It is doing a difficult job fairly and with general respect from all sides. If he wants to set about thumping them he should say so.
I did not say a word about them.
He asked questions which concerned them. If he had been a little more familiar with the facts he would have known they concerned them. I referred the matter of price control in the on-going world crisis in regard to oil to them. They reported to me and they urged that we take four steps. The dilemma which was discussed—of course people can be ignorant if they refuse to acquaint themselves with the sources that are available—was this: if we did not pay an amount of money for our crude comparable with other countries we would not get any. It was necessary for us to pay the world prices and also to pay them fairly quickly, because it would be no good coming back in two months, which was the then arrangement. On the other hand, we did not want to pay more than was necessary. Therefore, as a result of what they recommended and what I accepted in the light of these two considerations—not to pay more than we had to but to pay enough to get it and to make the price changes quickly so that we would not be starved and squeezed out of it—we did a number of things.
Firstly, we lifted the two month requirement. Secondly, we tied our prices to the outer zone in Britain. Of course in Britain the prices are processed by their prices commission so that there was a processing of the application not by ours but by theirs. We locked on to their price. The National Prices Commission have the on-going responsibility to monitor changes continuously, which they are doing. That was a mechanism through which we had the possibility of responding quickly, which was essential. If Deputy Barrett wanted two month delays he should say so but if he recognises the need for prompt response then he must accept that we have to make rapid changes. Our prices were fixed at the British level, with the monitoring of their prices commission and with the further monitoring because of the major shareholding by the British Government in BP, one of the biggest companies, so that they have a great deal of information about it. It gave us then a position comparable with our competitors in industrial terms and in consumption terms. It gave us the possibility of responding quickly. It did not increase our costs above theirs and it kept us in balance with them. Those were all desirable and obvious things and the reasons for them were set out in the NPC Report. They recommended, I accepted, nobody wielded a big stick and the reasons are perfectly good reasons and the actions were perfectly correct and appropriate actions which——
Panic.
Panic. It is a great word. The panic is coming from you and the damage is coming from you. Repeating words like "panic" is profoundly damaging. You did not take long when you got into Opposition to lose your sense of responsibility.
We learned that from you.
For the sake of trying to get yourselves back in you are quite willing to wreck this economy and to do profoundly irresponsible things like calling "panic" at this moment.
Now let us talk about the stock situation. Deputy Barrett got himself on to the front pages of the papers talking about £5 million worth of profits and talking about lack of information. If Deputy Barrett would avail himself of the documents that are put out he would have known the things that he produced with a flourish as the answer to his questions. He was told the total volume of storage by the Minister for Transport and Power. The essential point is that our stocks on 31st December were 358,000 tons. That is enough to last for approximately 40 days, in fact a little less. That brings you to the 9th February. The chief executive of Esso in this country who is also, if you want to assail him, the previous Government's appointee to the board of the IDA and a person of some reputation and stature in this country——
I did not assail him; I only quoted what he said.
He said, and if Deputy Barrett can prove the contrary he owes it to this House to tell us, that the price increases for the crude date from the 1st January. Do the arithmetic by assuming that no oil comes in—of course it has been coming in in January and February— the oil that we had on 31st December was used up on 9th February and the oil that has come in since 1st January is paid for at the higher prices.
He said the crude oil to which the increase in prices applied on 1st January was only now trickling through.
If you have 358,000 tons in stock on 31st December and that lasts you 40 days the stuff that came in at the higher price on the 1st January and on the following days is now, as he says, trickling through.
In Britain yesterday the prices went up. In our case we have applications and we will certainly have more. It is proper that we respond quickly. It is very unpleasant for all of us but to hoard it up two months when the British price had gone up would simply mean that we did not get it. If that is what Deputy Barrett wants he will have to say so.
It seems like wielding the big stick.
The point at issue is that the price rises now coming relate to oil which came into the country after the 1st January for which the higher crude prices were paid.
Do you believe that? I do not think you believe it. You certainly would not have believed it when you were on this side of the House.
It has been suggested to me that I should disbelieve, without any evidence for disbelieving, statements of responsible people of fairly senior standing. It is perfectly thinkable that one should disbelieve them but if you suggest that they ought to be disbelieved it is responsible to produce some evidence for it. I have given quantities of oil and dates and the statements of people of some standing. They can be disbelieved if you want to but you will have to give reasons.
If it is true that we had 40 days' supply, if it is true that the higher price was paid for the crude coming in on 1st January, then it is appropriate that when that crude gets through to be consumed the consumer pays the higher prices.
Will the Minister please conclude?
It is very unpleasant for all of us but there is no injustice and there is no profiteering. It seems to me an irresponsible thing and a damaging thing——
And no big stick.
No big stick. It is damaging and irresponsible for reasons of publicity to throw accusations of that kind around, totally unsubstantiated. It is an irresponsible and wrecking thing to do, thoroughly in line with the activities of the Opposition in regard to the whole energy crisis.
The Dáil adjourned at 11 p.m. until 3 p.m. on Wednesday, 13th February, 1974.