§ Mr. Greenwayasked the Chancellor of the Exchequer what is the outcome of his consultations with the industry on the Government's proposals on petroleum revenue tax valuation and pricing announced on 18 November.
§ Mr. Norman LamontWe received many helpful comments in the consultative process we initiated. These will be taken into account in putting the new valuation rules into legislative form to take effect, as announced, from 1 January 1987.
On the PRT pricing problem, we now propose to amend our approach. The legislation to be included in the 30W 1987 Finance Bill will apply to all North sea crudes. It will hinge on a producing company nominating particular transactions to the Inland Revenue, within the specified time limits before the oil is actually delivered, if those transactions relate to oil it has produced itself. In all cases where such a nomination is made, and the deal actually transacted as nominated, the price taken for PRT will be as under the present rules. Further details are contained in a press notice which the Inland Revenue is issuing today. In addition, a detailed outline of the scheme itself is being sent to all participators in United Kingdom oilfields; and this is also available on request from the Inland Revenue head office.
The new pricing scheme will apply in respect of deliveries from 1 March 1987. The Government are considering the need for further provisions to cover certain deliveries which would, under the proposed new rules, be brought in for PRT at "market value" but where a higher price may be achieved. We will in any case monitor the operation of the proposed rule very closely, and would not hesitate to propose further legislation should this be needed.