asked the Minister for Industry and Commerce if he intends to change the price increase mechanism for oil products to enable the National Prices Commission to examine price rise applications.
Private Notice Question: - Oil Prices.
It is not intended to change the present arrangements for control of petroleum prices. This arrangement was introduced on the advice of the National Prices Commission on 5th December, 1973 and the commission have since had the arrangements examined by consultants appointed by them. A summary of the consultants report was published in the commission's monthly report for May, 1975. The commission accepted the conclusion of the consultants that linking wholesale oil product prices to those in the UK outer zone is, in present circumstances, the most appropriate method of price control.
Is the Parliamentary Secretary aware that under the outer UK system all that is required of the oil majors is to give seven days' notice of price increases and that the Minister or the Prices Commission exercise no control over these increases? Is he further aware that the price increases now mentioned would cost the Irish consumer £50 million in one year? Is this not sufficient reason to revert to the old system operating prior to 12th December, 1973?
It was the National Prices Commission themselves who recommended the present procedure. They applied these procedures on three successive occasions and consultants appointed by them confirmed that these were the correct procedures. I would also point out that applications for increases in the UK outer zone are vigorously examined by the UK Prices Commission.
Is the Parliamentary Secretary further aware that the Minister for Transport and Power informed this House at that time that it was a panic decision because they were not assured of oil supplies? That was in December, 1973. This is two years afterwards and surely under present circumstances, when we are talking of £50 million that is involved for the Irish consumers, he would need to get further consultants to examine whether we should revert or not regardless of whose advice it was at that time? Surely £50 million is sufficient reason to examine the structure of the outer UK zone system?
If the National Prices Commission receive applications following the increases granted in Britain yesterday they will, of course, consider these and any factors the Deputy may wish to put before them but there have been no recommendations or representations or substantial evidence from any quarter suggesting that the present procedures are in any way inadequate or disadvantageous to Irish interests.
The Minister has admitted in the past that he has no control over price increases under the outer UK zone system—it is a matter of giving notification. That is a further reason in addition to the £50 million. Will the Minister ensure that the manner in which any increases are now applied will not facilitate the multinational refineries outside Ireland to make further vast profits at the expense of Irish consumers?
Any application will be considered carefully by the National Prices Commission and will then be referred to the Minister. I do not propose to go into details of the matter until I have the recommendation of the National Prices Commission.
Next business.
One supplementary——
I have allowed the Deputy a lot of latitude. We cannot debate this matter just now.
We are talking about £50 million and that is important, as the Chair will agree. Will the Parliamentary Secretary or his Minister give the House an assurance that stock profits such as the companies made in 1974 to the tune of £728 million on existing stocks will not now be made, when stock profits on this occasion would amount to £15 million, an estimate which is based on the reserve figure of 70 to 80 days' reserve stocks which the Minister for Transport and Power has told the House we now have? Surely the Minister is obliged to exercise some control over the oil situation which is costing this economy——
Speeches are not in order at Question Time.
The matters the Deputy mentions can be considered by the National Prices Commission——
Considered but not controlled.
——and a recommendation made thereon.
The Parliamentary Secretary said that if an application is received in respect of oil prices by the National Prices Commission it will be considered. Is this an application objecting to a price increase?
An application from the companies distributing oil in this country may be received following upon the increases granted in Britain and in line with the arrangements that have been outlined.
Did the Parliamentary Secretary not inform the House that the prices machinery in the UK is already employed and because this is a rigorous process it is automatically applied here in Ireland?
No application has yet been received consequent upon the increases apparently granted in Britain yesterday. No application was received here up to 4 o'clock today to my knowledge by the National Prices Commission.
Is it not a fact that our National Prices Commission automatically accede to applications of this nature because they have already been processed by British machinery? Is that the case?
The position is that the National Prices Commission considers an application from oil companies based on the fact that they have got an increase in the British market. The National Prices Commission can then authenticate whether the application is based on actual increases occurring in the British market. They are free to make any recommendation they wish following on that examination.
Within seven days?
Yes.
Is the Parliamentary Secretary serious in saying that they can process these things in seven days?
They appointed consultants to go into this in great detail and they came out in favour of the present arrangement.
A final supplementary question from Deputy O'Malley.
May I put it to the Parliamentary Secretary that if there is a price increase in Britain as there is this week, automatically, irrespective of the views of the National Prices Commission or anybody else, the price of oil in this country will increase by a corresponding amount? Is that not so?
It is necessary for the oil companies to make an application to the National Prices Commission which will be considered.
And seven days later it is granted. Is that not so?
I am taking the next business.
It is so. I am sorry to interrupt but this is very important.
This is not in Order. I have given Deputies a lot of latitude on this question and I have indicated that we cannot have a debate just now. I am going on to the next business.