§ Mr. Skeetasked the Secretary of State for Energy if he will publish in the Official Report the official forecasts, in index form using 1978 as a base, of diesel oil prices and electricity prices for 1980, 1990 and 2000; and if he will make a statement on the Likely relationship between oil prices and electricity prices.
§ Mr. Norman LamontEstimates of diesel oil prices (in non-transport use) and electricity prices for 1980 in index form (1978 = 100) to the extent that they are available are shown below:
Industrial Sector* Domestic Sector† Gas/diesel oil Electricity Heating oil‡ Electricity 1978 100 100 100 100 1980 191 125 169 138 * Source: Department of Energy survey of large industrial consumers. † Source: General index of retail prices. ‡ These include paraffins as well as gas/diesel oil Forecasts of these fuel prices are dependent on a wide variety of factors. For diesel oil, these include the price of crude oil, market forces within the oil product market, the price and availability of competing fuels, developments in taxation policy and technological developments, while for electricity they include the composition (in terms of fuel type), merit order and load factors of power stations, the prices of input fuels and the financial objectives of the industry. Developments in all these factors are extremely uncertain, and for this reason no official forecasts are made.
The increasing world price of crude oil will affect the terms of competition between all fuels, including electricity point. However, in view of the small proportion of electricity generated from oil-fired power stations at present and the likelihood that this will continue, and the factors mentioned above, there is unlikely to be a very close relationship between oil and electricity prices