asked the Minister for Transport and Power if, in view of the impact of the steep increases in the cost of electricity and gas, he will institute a study by an impartial body of industrial experts on the administration and working practices of the two public utilities involved with a view to effecting some reduction in the increases which bear so harshly on the economy generally and particularly on the more needy sections of the community.
Ceisteanna—Questions. Oral Answers. - Electricity and Gas Prices.
34.
The main reason for the increases in the cost of electricity and gas is the world-wide increase in oil prices. Any increases in charges are subject to investigation by the National Prices Commission.
The ESB have been the subject of two major inquiries in the last few years. The Fogarty Committee specialised in the board's industrial relations and the Fletcher Committee carried out an investigation into the general affairs of the board. In both of these cases the recommendations have been fully implemented in so far as lies within the board's capacity and in these circumstances a further inquiry would serve no purpose at this stage.
An investigation into the activities of the Dublin Gas Company was carried out in 1972 by a firm of consultants at the request of the National Prices Commission. Steps have been taken to implement recommendations made by the consultants with a view to improving the efficiency of the company.
I take it from the Minister's reply that he does not intend to have a further investigation carried out into the exorbitant charges of these two public utilities?
Yes, in the sense of having a formal public inquiry. It is quite apparent that the increase in oil prices has affected all electricity generators throughout the world. As against that, the National Prices Commission post facto investigated the increased surcharge levied by the ESB in relation to the oil price increases. This is an investigation into the justification for the price increases.
The public are disturbed that the two organisations concerned have a monopoly. I know that the price of oil is a contributing factor in the increased prices, but there are other practices operating in these organisations which might merit investigation to see if there could be more efficient administration.
One of the organisations concerned was investigated by the National Prices Commission and the other by the Fogarty Committee and the Fletcher Committee. The recommendations of the three investigations have been implemented; in the case of the ESB they have been implemented fully and are in the process of implementation in the case of the Dublin Gas Company. I do not agree that an investigation is not being carried out on an on-going basis. That is the function of the National Prices Commission. They do not readily grant price increases, as the Deputy seemed to imply. Every application is thoroughly investigated by them and must be justified by invoices and books showing the prices paid. It is only very reluctantly that the National Prices Commission grant increases.
However, the Deputy must realise that the bulk of our electricity is generated from oil which is an imported product. The ESB are now paying in excess of eight times the amount they paid 12 months ago. In that situation the choice for the ESB, and the National Prices Commission must have regard to this, is to do without the oil, in which case we will not be able to generate the electricity —and 65 per cent of our electricity comes from oil—or to pay the increased prices. These were the choices open to the ESB when they applied for an increase, and to the National Prices Commission who had to decide whether to grant or refuse it. The refusal of a price increase would have meant the ESB would be unable to purchase the oil, would be unable to supply electricity, with a consequent running down of industry and an increase in unemployment which nobody wants.
May I ask the Minister if any recommendation was forthcoming regarding the removal of VAT?
No, the inquiries were pre-VAT.
I am calling Question No. 35.
The Minister in his reply put emphasis on the price of oil. Has the Minister carried out any investigation into the structure of the two organisations to see if economies could be effected so that the consumers might benefit?
I have said that the ESB were investigated on two occasions and the National Prices Commission engaged a firm of consultants 18 months ago to investigate the gas company. In the case of both organisations the recommendations have been, or are being, implemented.
Has the Minister issued a recommendation to the Minister for Finance for the removal of VAT?
The Chair has allowed a virtual debate on this matter. I have called Question No. 35.