asked the Minister for Industry, Trade, Commerce and Tourism if he will redefine Government policy on the pricing of petrol and petroleum products; and the steps he proposes to take to provide a satisfactory price structure mechanism for these products.
Ceisteanna—Questions. Oral Answers. - Petroleum Products Pricing Policy.
13.
My function in this matter is the administration of price control on the selling prices of petroleum products. The objective of current policy in this regard is that the pre-tax prices of petroleum products here should relate to pre-tax market prices elsewhere in the European Community so far as possible as is consistent with maintaining availability of supplies. In so far as competition does not achieve this objective price control mechanisms will continue to be applied. In line with this policy, a new system of monthly reviews of petroleum product prices was, on the advice of the National Prices Commission, introduced in June 1984. As indicated in the national plan, the system is designed to generate greater competition and is structured so that Irish prices will move in line with international market prices. Full details of the new system and the monthly reviews under the system are contained in the monthly reports of the National Prices Commission which are circulated to Deputies.
Is the Minister aware that the prices of petroleum products, and of petrol in particular, have been falling in many countries in Europe, especially in the past month, and can he indicate why we must be subjected to price increases in this essential commodity on a monthly scale and why there was yet another increase yesterday morning following three in the past three months? Has the Minister any proposals for dealing with this provision?
As the Deputy is well aware, while prices in terms of the dollar are falling, the value of the dollar is increasing. One factor can counteract the other. I am aware of the various moves which have been made in regard to oil prices in dollar terms and, even in the most sensitive system, there is some delay in incorporating them in prices here. If they indicate a significant and lasting reduction in the spot price it is hoped that they will be incorporated in prices in the next monthly review.
Would the Minister agree that when he introduced the new system of price structure in June 1984 he indicated at that time that the possibility was that there would be some decreases in the price of these products and that his policy has now backfired?
We cannot have a discussion on policy.
Does the Minister realise that this continuous spiral of price increases for petrol is pricing us out of the market, not just in the area of tourism, but in regard to competitiveness on the industrial front as well? Can he not do something about our contractual arrangements internationally and about our purchasing and storage arrangements to stabilise prices in this vital area?
Much as I would like to stabilise the prices in this area it is not possible to do so in a commodity where prices are so variable and volatile in the outside world. All these products are brought into this country and if we attempted to stabilise prices here we would have to subsidise the products at some times and tax them at others to achieve stability and it would not be feasible administratively. The Deputy probably mistakes the purpose of the new price control regime if he thinks it was designed to reduce prices. It was designed to ensure that prices would move in line with spot prices internationally reasonably soon after the movement took place in the spot price, thereby having an independent external check on the prices that would be charged in this country. This replaced a system where companies importing to this country put in applications based on allowable costs and were allowed increases at much more infrequent intervals which meant at times that Irish prices were way above the prevailing world price for quite a long time, indeed sometimes below it. It also had the inherent defect that the companies were able to put in perhaps their most expensive recent purchase of petrol as the allowable cost of the petrol going to Ireland, thereby, theoretically at least, being able to claim a higher price than perhaps should have been given on the basis of what the consignment coming to Ireland actually cost. This got us into an administrative tangle which our present regime got us out of, as the price is related to movements in spot prices over which individual oil companies have no control.
Does the Minister agree that spot prices have been falling for the past few months and that the benefit of purchasing on the spot market has not been passed on to the Irish consumer? While the Minister may have great administrative difficulties — I know it is very confusing — the man in the street was promised a reduction in the price of petrol——
He was not.
——in June 1984 when the Minister introduced this policy. The Minister's policy in the pricing of these products has failed.
The Deputy understands perfectly well what I am saying but, rather than listening to what I am saying, he is putting himself in the position of the man in the street. He is not the man in the street; he is a well informed Member of this House and he knows exactly what is happening. He should not pretend otherwise.
The man in the street does not understand.
We should try to explain to him that this system ensures that prices in Ireland move closely in line with spot prices. While spot prices, which are expressed in dollar terms, may have fallen, the dollar has risen which counteracts——
(Interruptions.)
I am not trying to gloss over this matter. The dollar has risen and, therefore, the price in Irish £s for petrol has not necessarily fallen.
(Interruptions.)
Could I ask one question?
No, question time is being abused.
I just want to ask how much excise duty——
I am asking Deputy O'Kennedy to resume his seat and he must do so.
(Interruptions.)
Deputy O'Kennedy must resume his seat or I will have to take a certain course.
Questions Nos. 14 and 15 postponed.