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Oil Costs

Volume 978: debated on Wednesday 13 February 1980

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asked the Secretary of State for Energy whether the price of oil supplied to the public electricity supply industry has risen as fast as the price of imported crude oil since 1978; and if he will circulate a table in the Official Report showing the estimated cost on the basis of current prices of (a) a ton of heavy fuel for power generation, (b) a ton of light fuel, (c) a ton of coal and (d) the estimated works cost per kilowatt hour of electricity supplied from coal and oil-fired steam power stations on an estimated annual basis using these prices and showing fuel costs, and, if available, estimated operational costs and capital charges.

I am advised by the CEGB that the rate of increase between 1978 and 1979 in the unit value of heavy fuel oil supplied to the CEGB has been greater than that for crude oil imported into the United Kingdom in the same period. The average price for oil supplied to the e.s.i. in 1979 is not yet available but will be published later this year in the digest of United Kingdom energy statistics for the CEGB and the Scottish boards together. Current prices paid for fuel supplied to the board are commercially confidential. Fuel costs and operational costs of generation are published annually in the CEGB's annual report and statistical yearbook. The latest available figures were contained in the report for 1978–79 published in July 1979. The estimates requested could only be provided at disproportionate cost.

Power stations in Scotland and Northern Ireland are the responsibility of my right hon. Friends the Secretaries of State for Scotland and for Northern Ireland respectively.

asked the Secretary of State for Energy what information he has about the current cost per ton in shipping crude oil by very large crude carrier from Nigeria and North Africa; to what extent the price of North Sea oil takes account of this; and if he will publish a table in the Official Report outlining the position.

The most recently published world scale AFRA shipping rates to Rotterdam are:

From Africa$tonne
Nigeria5·11
Algeria2·53
Libya3·32
From the United Kingdom$tonne
Grangemouth4·81
Sullom Voe5·04
Flotta4·66
The relatively high cost of North Sea transport is due to the much smaller size of vessel used compared with the very large crude carriers used for intercontinental transport. On average North Sea transport costs to Rotterdam are some 17c/ barrel more than average costs from Africa to Rotterdam. Consideration is given to freight rates when prices are negotiated.