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New prices for Indigenous cruse oil and LPG and related excise rates- to apply from 1 July 1982



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J lW)7T by the Minister for National Development and Energy-1,. AUSTRALIA,.,> _____________________________ , J jy . PRESS STATEMENT 8 2 /2 5

NEW PRICES FOR INDIGENOUS CRUDE OIL AND LPG AND RELATED

EXCISE RATES - TO APPLY FROM 1 JULY 1982

The Minister for National,Development and-Energy, Senator

Sir John Carrick, today announced details of the new import

parity prices for indigenous crude oil to apply’ from 1. July

1982. The new prices are as follows:

(delivered at Brisbane and Maranoa)

The detailed derivation of these prices is shown at Schedule 1.

The producer returns and the crude oil excise rates for crude

discovered prior to 18 August 1976 vary according to the

Import Parity Price

$ per kilolitre $ per barrel

Bass Strait Crude Oil 223.12 35.46

(delivered at Westernport)

Barrow Island Crude Oil 225.85 35.89

(delivered at Kwinana)

Dongara Crude Oil 210.66 33.48

(delivered at Kwinana)

Moonie Crude Oil 231.28 36.75

oil

• · . 2 . .

level of annual production for each oilfield; the producer

returns and excise rates to apply from 1 July 1982 are set

out in Schedule 2. .

The Minister said that these prices had been determined in

line with the policies and procedures which the Government

had followed consistently since August 1977. The import

parity price is based on the current official price of

Arabian Light (US $34 per barrel) and certain other factors

such as freight, insurance and quality differentials (see

Schedule 1). . '

The price of Arabian Light has become the benchmark for

fixing the prices of a number of crude oils because of its

dominance in international markets. It is an appropriate

"benchmark" for Australian crude oil pricing, given that

approximately 55% of Australian crude oil imports are

sourced directly from Saudi Arabia. The current official

price of Arabian Light was set at US $34 per barrel following

the OPEC meeting in October 1981 and has been maintained

at this level, despite coming under some pressure earlier

this year. Spot prices for Arabian Light and other

internationally traded crude oils are now generally close

to their official prices.

Given that the price of the "benchmark" crude remained

unchanged, the increase in the import parity price to ·

apply from 1 July 1982 is attributable mainly to the

9% increase in the Value of the US dollar relative to

the Australian dollar over the past 6 months or so.

3.

As a result, the cost (in Australian dollars) of Arabian

Light landed in Australia has increased and this is reflected

in the new prices to apply to Australian crude oil.

This import parity price values, in effect, domestic crude

oil at the price Australians would have to pay to replace

that oil with imported oil.

Senator Garrick indicated that the increases in the price

of Australian crude oil could be expected to lead to

increases in the prices of petroleum products. On the basis

of past experience the increase in the price of petrol could

be expected to be of the order of 2 cents per litre. The

Minister said that while he regretted all such price increases,

he believed it was essential from the point of view of

encouraging continuing conservation and oil exploration and '

development activities that crude oil be appropriately

priced. The import parity pricing policy achieves this

objective. The Minister pointed, out that petrol prices in

capital cities, as measured by the Consumer Price Index, have

increased only 5% over the past twelve months - or by about

half the general inflation rate. It was relevant also that

petrol prices in Australia remained significantly lower than

in most other countries.

Senator Garrick announced that the maximum wholesale price

of naturally occurring LPG (propane and butane) will be

increased to $220.09 per tonne with effect from 1 July 1982.

4.

This represents an increase of $19.94 per tonne and again

largely reflects the appreciation of the US dollar relative

to the Australian dollar over the past 6 months or so. The

Minister noted that the increase in the price of LPG is

equivalent to about 1 cent per litre which would maintain

its attractiveness as an alternative fuel for automotive u se.

The Minister also announced that the new rate of excise ·

for naturally occurring LPG of $25.93 pr kilolitre would ,

apply from 1 July 1982. In line with the arrangements

announced on 8 April 1980, the rate of excise is set

at 60% of the average wholesale price (in both domestic

and export markets) in excess of $147 per tonne.

CANBERRA

24 June 1982

Inquiries:.

A.G.Christie 0 6 2 -4 5 3 3 9 0 (BH 0 6 2 -3 1 7 5 8 5 (AH A.A.Garran 0 6 2 -4 5 3 7 9 2 (BH 0 6 2 - 2 7 1 6 5 1 '(AH

SCHEDULE 1

DERIVATION OF THE IMPORT PARITY PRICES FOR INDIGENOUS CRUDE

OIL TO APPLY FROM 1 JULY 1982 (a)

Bass Strait Barrow Island Dongara Moonie

. ,

$ US per Barrel

Official Price of the Marker Crude Saudi Arabian Light

34.00 34.00 34.00 34.00

Freight ex Ras Tanura(b) 1.34 1.40 1.40 1.97

Insurance and Loss 0.21 0.21 0.21 0.22

Quality Differential(c) 1.50 1.59 -0.88 1.35

Sub-total $US components 37.05 37.21 34.74 37.54

$ A per Barrel

Converted $A at 1.0479(d) 35.36 35.51 33.15 35.82

Wharfage . 0.06 0.00 0.00 0.14

Special Frieght Allowances(e) -0.35 0.00 0.00 0.44

Compensation for Credit(f) 0.39 0.39 0.33 0.36

IMPORT PARITY PRICES

($ per barrel) 35.46 35.89 33.48 36.75

($ per k l ) 2 23-12 225.85 210.66. 231.28

(a) Any discrepancies between sums of the component items and totals, are due to rounding. .

(b) Official, published AFRA rates to the nearest refinery p o r t , i.e. Westernport, Kwinana and Brisbane respectively.

(c) This reflects the relatively higher yields of higher priced "white" products from most Australian crude oils relative to Arab Light.

(d) Exchange rate at 1 June 1982. . .

(e) These reflect coastal and inland freight costs.

(f ) This compensates the producers who pay the levy an average of 24.5 days before they are paid by the refiners. This component also compensates the producers to the extent that terms of payment for indigenous crudes are longer than those that apply to Arab Light.

SCHEDULE 2

PRODUCER RETURNS AND CRUDE OIL, LEVY FOR EACH CATEGORY OF

FIELD TO APPLY FROM 1 JULY 1982

,

Producer Returns Crude Oil Levy (net

of rebates)

($ per k l ) ($ per barrel) ($ per kl) ($ per barrel

Parity Crudes

· >

Small- Fields ’ - '

Bass S t . 204.22 32.46 18.90 3.00

Barrow Is. 206.95 32.89 18.90 3.00

Dongara 191.76 30.48 18.90 3.00

Moonie - 212.38 . 33.75 18.90 3.00

Medium Fields

Bass St. 101.36 16.11 121.76 19.35

Barrow Is. 102.46 16.28 123.39 19.61

Large Fields

Bass St. 83.86 13.33* 139.26 22.13

Μοή-Parity Crudes

Bass St. 17.15 2.73 205.97 32.73

Barrow Is. 20.55 3.27 205.30 32.62