The object of this Bill is to confirm the Restrictive Practices (Motor Spirit) Order, 1979 which I made on 12 June under the Restrictive Practices Act, 1972. This order extends for another year a statutory ban on the operation of new motor spirit stations by oil companies. The order was due to expire shortly.
The supply and distribution of motor spirit and lubricating oils has been the subject of legislation since 1961. The first order was made following an inquiry held in 1960 by the Fair Trade Commission. That inquiry was concerned principally with examining the merits of the "solus" system, the system under which a retailer agrees to handle one brand of motor spirit exclusively. It found that while the system had certain merits, it needed to be regulated because of its tendency to encourage an excessive number of petrol outlets. The system was regulated by the 1961 order, and shortly afterwards the Fair Trade Commission and the petrol companies reached agreement on certain guiding principles designed to limit the increase in outlets.
In the following years the guiding principles did not appear to be operating effectively as the number of company-owned outlets grew substantially, from 133 in 1960 to 394 in 1969. There was also concern that the regulation of the solus system was leading the oil companies to increase the number of directly-operated outlets. Accordingly, in 1970 the Minister requested the commission to hold an inquiry into this growth in outlets.
The Commission reported that the growth in the number of company-run stations was not in the public interest as it could lead to abuses if the oil companies attained a dominant position in the retail market. In 1972 an order was made prohibiting oil companies from operating retail outlets which were not previously operated by them. The order was made initially for a period of three years; in 1975 it was reviewed and, on the recommendation of the commission, extended for a further three-year period.
Following the review in 1975, the commission suggested that, when they next reviewed the prohibition, they should also review the orders as a whole. The commission had also stated in their report of the review that they received representations on matters relevant to the orders but as they were outside their terms of reference they could not consider them. Accordingly I decided, when requesting the recent inquiry, that they should not alone look into the operation of the orders as a whole, but also any matters germane thereto. I also decided that they should look into a matter which had been a source of grievance to some people in the trade for a number of years—the conditions under which persons who are not employees of the oil companies operate their stations under licence. The order was renewed in 1978 to allow the commission to hold an inquiry into these matters.
The commission held the public hearings in connection with this inquiry in the early months of this year. They have indicated to me, however, that they will not be in a position to report to me for some time yet. In these circumstances the currency of the prohibition on the operation of new company outlets was extended for a further year.
The Restrictive Practices Act provides that orders of this kind shall not have effect unless they are confirmed by an Act of the Oireachtas. The Bill now before the Seanad is the confirming Bill required to give the force of law to the order. The order may not be amended, but must be accepted or rejected as it stands.
I have no hesitation in recommending it to the Seanad.