§ Lord JACQUES
asked Her Majesty's Government:
Whether they will provide a table showing the price paid by industry in the United Kingdom for firm supplies of natural gas compared with the prices paid by industry in France, West Germany, Italy and the Netherlands.
The Earl of GOWRIE
Industrial consumers' prices for firm supplies of natural gas are difficult to ascertain on a comparable basis for European countries, especially where high annual consumption levels are involved and the fuel is sold either under contract at individually negotiated prices (as in the Federal Republic of Germany and the United Kingdom) or by tariffs which may involve complex formulae containing oil-related escalation clauses and load factors.
In making international comparisons it must always be borne in mind that difficulties can arise in times of rising prices and currency exchange fluctuations. Methods of collating the data in each country may not always provide comparable figures. There may, moreover, be wide ranges of prices within countries and tariffs may vary according to consumption levels.
It should also be noted that in Britain a large proportion of gas supplies to industry are on contracts which provide for interruption in severe weather. In such circumstances the consumer will generally have available a supply of heavy fuel oil. Based on a survey of some 900 large industrial consumers in the United Kingdom during the period 1st January 1980 to 31st March 1980 the average price paid for natural gas, both 1775WA firm and interruptable supplies, was 16 pence per therm.
The latest available data for firm supplies of gas compiled by the Statistical Office of the European Community are shown below for a representative city in each country. Prices are given for two levels of consumption and are based on prices (exclusive of VAT) in force on 1st January 1980.
GAS PRICES (EXCLUSIVE OF TAXES) TO INDUSTRIAL CONSUMERS IN SELECTED CITIES IN THE EEC
Annual Consumption 4,000 Therms 4,000.000 Therms Dusseldorf 35.4 24.32–25.36(1) Paris 303 19.50–20.20(1) Rome 31.7 19.53 Rotterdam 20.9 18.27 London 24.5 25.85(2)
National currencies have been converted at exchange rates current on 31st December 1979.
(1) Prices vary according to Load factors.
(2) Price is based on an estimate for new contracts only and is derived from related oil prices. The figure is therefore not on a comparable basis with the figures for other towns which are generally based on tariffs. According to the BGC the average price in the United Kingdom for renewing contracts for firm supplies of gas on or about 1st January 1980 was 23.5p/ therm.