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Tuesday, 30 March 1971

Senator COTTON - For some time I have had some information on this matter. I think honourable senators will recall that in 1968 - I am not sure which month - the Government negotiated a price for Australian produced crude oil which was based on import parity. I think it was done in or about September of 1968. Recently, large increases have been announced in the price of overseas crudes. When compared to prices at which indigenous crude oil is available these new prices show increases per barrel of the order mentioned by the honourable senator. In view of these increases Australia is fortunate that it has available to the refiners and marketers of petroleum products a source of crude oil which now supplies 50 per cent and which will shortly supply 70 per cent of our crude oil requirements at a price which is considerably lower than that of most overseas crudes. This is most important because of the very large import savings that have resulted and will continue to result from the supply of crude oil from our own fields. At peak production this import saving would amount to about $325m a year. It is also important to note that, because of Government policy that stabilised the price of indigenous crude oil, the Australian market has been insulated to a marked extent from the effects of the recent steep rises in the cost of overseas crude oil. If the rises in overseas crude oil prices were to be reflected in the price paid for indigenous crude oil, the added cost of crude oil today would be about $50m a year and, at peak production rates, with a price disparity of 76c a barrel, could rise to Si 00m a year.

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