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Wednesday, 14 November 1973
Page: 3284

Mr BERINSON (PERTH, WESTERN AUSTRALIA) - I ask the Minister for Minerals and Energy: Is it possible to estimate the total cost to Australia of recent increases in imported oil prices? How are these likely to be reflected in the prices locally of motoring, aviation and industrial fuels? Given that whatever uncertainties exist in international oil supplies at least it is certain that such supplies as are available will come at continually and sharply increased prices, has any study been made of possible economies in Australia with respect to oil consumption, other than that announced by the Minister for Transport regarding car engine capacities? If not, will the Minister consider having such a study commissioned at an early date?

Mr CONNOR (CUNNINGHAM, NEW SOUTH WALES) (Minister for Minerals and Energy) - The detailed information of the increased tax and royalty payments to each Middle East country is not yet available. From the latest information received we expect the increase to be an average of $US1.20 a barrel. In equivalent Australian currency, that is about 80c a barrel. As approximately one third of the refinery throughput consists of imported crude that, in turn, would mean an increase of approximately 26 2/3c a barrel of crude. Of course, it will depend on the refinery procedures in the individual refineries as to what the cracking finally yields, lt could be taken as a fair sample, that in respect of motor spirit in the heavy Middle East crude, there will be a yield of about 15 or 16 gallons from a 35-gallon barrel of crude. From that the quick calculation can be made to show that the increase in the price of motor spirit would be minimal only.

The Government is keeping a close watch on the whole matter because kites are being flown. I noted one being flown this morning in a responsible financial journal. The oil companies, of course, are not above trying to get in for their cut before the situation exists and doing a little preliminary softening up of the consuming public. With regard to imports generally, we are importing approximately 198,000 barrels of crude a day. The rise in costs over an 8-month period would be a matter of $3 8m. It is not possible to allocate the costs exactly to individual products for reasons that -I have already stated, but I would say that the impact will fall most heavily upon the consumers of fuel oil. The consumption of fuel oil is of course the paramount reason for the importation of crude from the Middle East. I might stress also that contrary to the panic propaganda some 27 or 28 per cent of the imported crude does not come from the Organisation of the Petroleum Exporting Countries at all. That is another factor which has to be taken into account. We are watching the whole position very closely and I will be very pleased to institute any possible economies of consumption that can be reasonably introduced. I will act for that purpose. At the same time I am determined to see that no reduction occurs in the productive capacity of Australia and that the minimum inconvenience is caused to the people and particularly to the motoring public.

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