Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 26 March 1985
Page: 885


Mr GEAR —Can the Minister representing the Minister for Resources and Energy explain why the import parity price for indigenous crude oil has not fallen along with the prices of overseas crude oils, thus resulting in lower petroleum prices in Australia?


Mr BARRY JONES —Crude oil prices overseas have fallen only in United States dollars. Recently the fall in the Australian dollar relative to the United States dollar has more than offset the reduction of the price of overseas crude oils. Therefore, lower retail petrol prices have not been possible at this time. We are not Robinson Crusoe in that either. Many other oil importing countries have had similar experiences. The Government has been consistent in applying the import parity pricing policy and did reduce Australian prices on 1 April 1983, 1 July 1983 and 1 January 1984.


Mr Howard —It is a very good policy.


Mr BARRY JONES —I am glad to hear the endorsement of the Deputy Leader of the Opposition and the leadership aspirant of the Liberal Party. The IPP policy results in Australian crude oil being priced at the cost of replacing it with imported crude oil of a similar quality. Relevant factors used in its determination include the cost of importing Arab light purchased at the official government selling price, transport costs, the United States dollar-Australian dollar exchange rate, and an allowance for differences in the quality between the marker and indigenous crudes. As Australia is expected to be a net importer of petroleum over the long term, the principle of pricing Australian crude at its replacement cost provides a sound and stable basis for pricing indigenous crudes. It has also provided a healthy environment for petroleum exploration and development in Australia. The Government will of course continue to monitor the situation closely and will keep all options under review. Account will be taken of movements in both overseas crude oil prices and the Australian dollar exchange rate when the Government comes to consider the price to apply after the next adjustment date, which will be 1 May 1985.