§ 16. Mr. Doddsasked the Minister of Fuel and Power what consideration has now been given to the Report of the United Nations Economic Commission for Europe which alleges that the oil companies are charging unreasonably high prices; and what action is contemplated to deal with this problem.
§ The Minister of Fuel and Power (Mr. Geoffrey Lloyd)This study was undertaken by the Secretariat of E.C.E. on their own initiative and has not been endorsed by Governments. Her Majesty's Government have examined it carefully but do not consider that further action is warranted. In their opinion the forces of world competition are more likely than Government intervention to ensure the proper pricing of oil.
§ Mr. DoddsDoes the right hon. Gentleman mean that this Report has 13 been studied and that the Government think there is no truth whatever in the assertion that oil and petrol are too expensive? Will he get up and say that the Government are fully satisfied with the situation and protect the oil racketeers?
§ Mr. LloydNo, Sir, but there are implications in this Report which have been very much misunderstood, more particularly by the right hon. Member for Ipswich (Mr. Stokes), who gave the impression that the price of crude oil was only about £1 a ton in the Middle East——
§ Mr. Lloyd—whereas if the Report is carefully read it will be seen that, although it gives an impression that the net profit was applied entirely to the oil companies, in fact 50 per cent. of it was paid to the Middle Eastern Governments, and therefore the real cost of the oil to the companies is not £1 a ton but almost £3 a ton.
§ Mr. StokesThat is all very well. May I ask the Minister whether he is aware that crude oil from the bowels of the earth in the Middle East costs only £1 a ton into the tanker, whereas it is £3 10s. more from Texas into the tankers in the Gulf of Mexico? I am perfectly well aware that the royalties are now shared, but even so the profits made by the oil companies in the Middle East are more than double those made by the oil companies in America.
§ Mr. LloydI am glad the right hon. Gentlemen has now put himself right on this point. The impression which he gave was that the cost of oil in the Middle East was £1 a ton, whereas in fact it was £3 a ton. The right hon. Gentleman was therefore only 200 per cent. out, a rather slender margin for him.
§ Mr. StokesThe Minister wilfully misunderstands me. What I said was that the cost of oil into the tanker in the Middle East was £1 per ton. That price then becomes £4 10s. a ton. I agree that under the new arrangements the royalty owners—in other words, the countries concerned—get 50 per cent. of the profits. That is perfectly true. There is 14 still £3 10s. a ton to be divided between the two of them, and the half which the oil company gets is still a great deal more than any American oil company gets.
§ Mr. LloydIn any case the right hon. Gentleman also gave the impression that this country got no advantage from the import of oil from the Middle East, whereas in fact crude oil imported into this country from the Middle East is obtained at £2 a ton less than that from the United States.
Mr. H. WilsonWill the right hon. Gentleman, instead of misrepresenting my right hon. Friend the Member for Ipswich (Mr. Stokes), tell the House what he has to conceal on this question? In view of the prima facie indictment of the oil companies in this Report and in view of a whole series of independent comments, such as those of the "Economist," saying that Gulf prices are now totally irrelevant to conditions in this country, will the right hon. Gentleman not at least have an independent inquiry into this subject so that we can know what are the facts?
§ Mr. LloydI think the right hon. Gentleman is being very unfair when he talks about a prima facie indictment of the oil companies based on exactly the kind of misunderstanding that I have mentioned, which is 200 per cent. wrong.