§ Mr. Austin Mitchellasked the Secretary of State for Energy if he will circulate in the Official Report a table showing for each year since 1972 and for each quarter since the beginning of 1978 (a) the landed price per ton of crude oil, (b) the ex-refinery or wholesale price of a representative barrel of petroleum products, and (c) the wholesale price of petroleum spirit.
§ Mr. GrayTable 1 shows the average price of crude oil to United Kingdom refineries. All crude imports, and North Sea Oil landings where appropriate, have been taken into account in determining an average landed price. The data in table 2 is based on the net selling value of individual petroleum products—exclusive of taxes, trade discounts and commissions—which are available on a consistent basis only since 1973 in the business Monitor series of "Statistics" issued by Business Statistics Office.
The data required to provide a meaningful annual average wholesale price of 554W petroleum spirit could only be obtained at disproportionate cost. Table 3 shows the average schedule price for four star petrol to industrial and commercial consumers in June of each year and at the end of each quarter since 1978 for deliveries of about 12,500 litres in the "outer zone price area"—that is, a relatively densely populated area relatively distant from oil refineries and major oil distribution centres. The prices may not be representative of those paid by individual consumers as discounts offered by the various oil marketing companies in their pricing policies have not been taken into consideration.
TABLE 1 AVERAGE LANDED PRICE OF CRUDE OIL £/ton 1972 8.90 1973 11.62 1974 34.16 1975 39.33 1976 52.22 1977 59.45 1978— 1st quarter 54.72 2nd quarter 55.93 3rd quarter 55.02 4th quarter 53.19 1979— 1st quarter 55.47 2nd quarter 62.78 3rd quarter 74.11 4th quarter 80.41 1980— 1st quarter* 98.24 555W
TABLE 2 EX-REFINERY PRICE OF A REPRESENTATIVE BARREL OF PETROLEUM PRODUCTS £/barrel (excluding duty) 1973 1.82 1974 4.90 1975 5.97 1976 7.53 1977 8.67 1978— 1st quarter 7.90 2nd quarter 8.02 3rd quarter 8.03 4th quarter 7.89 1979— 1st quarter 8.46 2nd quarter 10.26 3rd quarter 12.39 4th quarter* 12.94
TABLE 3 AVERAGE SCHEDULE PRICE OF 4 STAR PETROL (OUTER ZONE) £/ton (including duty excluding VAT) June 1972 102.72 June 1973 107.22 June 1974 150.84 June 1975 162.87 June 1976 195.51 June 1977 227.58 March 1978 227.58 June 1978 227.58 September 1978 227.58 December 1978 227.58 March 1979 221.64 June 1979 258.99 September 1979 225.39 December 1979 288.66 March 1980 319.11 June 1980 351.99 * Provisional.
§ Mr. Austin Mitchellasked the Secretary of State for Energy what effect an increase of 50 per cent. in the real price of crude oil would have on the retail price index after six months.
§ Mr. GrayIt is extremely difficult ever to make reasonably reliable estimates for the indirect effects of such an increase, but, on the basis of such information as is available, it may not be altogether unreasonable to expect that a 50 per cent. increase in the real price of crude oil would eventually create an increase in the general index of retail prices of approximately 3 per cent. There are no estimates of the rate of growth of this figure over the period following the initial increase.
The real price increase in the above estimates is taken to be the price increase over and above that of the retail price index itself.
§ Mr. Austin Mitchellasked the Secretary of State for Energy what effect an increase of 50 per cent. in the real price of crude oil would have on the real price of refinery products, on average, at the wholesale and end-use stage; what would be the increase required in the ex-works price of competing fuels to bring their prices into line in terms of fuel efficiency; and what would be the overall effect in terms of fuel consumption.
§ Mr. GrayA 50 per cent. increase in the real price of crude oil delivered to556W the United Kingdom would increase the average wholesale price of oil products, including duties, by 35 per cent. The end use price, including retailers costs and VAT where applicable, would increase by 30 per cent., given unchanged rates of duty and VAT.
The relative efficiencies with which fuels can be used for heating and industrial processes can only be compared at the final consumer stage, and the relativities will vary from one type of consumer to another. However, in broad terms the increases in the delivered costs of oil stemming from a 50 per cent. increase in the cost of crude oil would have a similar impact on the fuel cost per useful therm as would a 30 per cent. rise in the delivered cost of electricity, 70 per cent. for coal and 95 per cent. for gas.
It is difficult to analyse the effects of such a hypothetical array of increases on overall fuel consumption, but the results of some studies would suggest an initial reduction of around 10 per cent., with further long-term savings.