EXCERPT FROM THE CONGRESSIONAL RECORD BY HON. DONALD M. FRASER OF MINNESOTA IN THE HOUSE OF REPRESENTATIVES, FEBRUARY 25, 1975 How EUROPE AND JAPAN TAX OIL AND GASOLINE Mr. FRASER. Mr. Speaker, our European and Japanese allies have had to cope for some time with severe balance-of-payments problems because of dependence on oil imports. We might do well to look at how these countries have distributed taxes on petroleum products. I include in the Record at this point charts comparing the tax component in the market price of oil and various oil products in Europe, Japan, and the United States: TAX COMPONENT IN THE MARKET PRICES OF FUELS IN THE EUROPEAN COMMUNITY 1 Rotterdam, where the Arab embargo was in effect longer than in the United States, had no tax on heating oil in 1968 and only a 4.1 percent tax in October 1973. By contrast, the tax on industrial fuel had been 23.3 percent of the market price in October 1973 and was reduced to 19.3 percent in January 1974. Note: Complied from statistics furnished by the Statistical Office of the European Community. Note: Compiled from statistics by the Fuels and Energy Office, Department of State. Notes: Tax figures include value added tax where applicable. Compiled from statistics furnished by the Federal Energy Administration. (55) AGREEMENT ON INTERNATIONAL ENERGY PROGRAM The Governments of the Republic of Austria, the Kingdom of Belgium, Canada, the Kingdom of Denmark, the Federal Republic of Germany, Ireland, the Italian Republic, Japan, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, Spain, the Kingdom of Sweden, the Swiss Confederation, the Republic of Turkey, the United Kingdom of Great Britain and Northern Ireland, and the United States of America, Desiring to promote secure oil supplies on reasonable and equitable terms, Determined to take common effective measures to meet oil supply emergencies by developing an emergency self-sufficiency in oil supplies, restraining demand and allocating available oil among their countries on an equitable basis, Desiring to promote cooperative relations with oil producing countries and with other oil consuming countries, including those of the developing world, through a purposeful dialogue, as well as through other forms of cooperation, to further the opportunities for a better understanding between consumer and producer countries, Mindful of the interests of other oil consuming countries including those of the developing world, Desiring to play a more active role in relation to the oil industry by establishing a comprehensive international information system and a permanent framework for consultation with oil companies, Determined to reduce their dependence on imported oil by undertaking long term cooperative efforts on conservation of energy, on accelerated development of alternative sources of energy, on research and development in the energy field and on uranium enrichment, Convinced that these objectives can only be reached through continued cooperative efforts within effective organs, Expressing the intention that such organs be created within the framework of the Organization for Economic Co-operation and Development, Recognizing that other member countries of the Organisation for Economic Co-operation and Development may desire to join in their efforts, Considering the special responsibility of governments for energy supply, Conclude that it is necessary to establish an International Energy Program to be implemented through an International Energy Agency, and to that end, Have agreed as follows: Article 1 1. The Participating Countries shall implement the International Energy Program as provided for in this Agreement through the International Energy Agency, described in Chapter IX, hereinafter referred to as the "Agency." (56) 2. The term "Participating Countries" means States to which this Agreement applies provisionally and States for which the Agreement has entered into and remains in force. 3. The term "group" means the Participating Countries as a group: Article 2 Chapter I. Emergency Self-Sufficiency 1. The Participating Countries shall establish a common emergency self-sufficiency in oil supplies. To this end, each Participating Country shall maintain emergency reserves sufficient to sustain consumption for at least 60 days with no net oil imports. Both consumption and net oil imports shall be reckoned at the average daily level of the previous calendar year. 2. The Governing Board shall, acting by special majority not later than July 1st, 1975, decide the date from which the emergency reserve commitment of each Participating Country shall, for the purpose of calculating its supply right referred to in Article 7, be deemed to be raised to a level of 90 days. Each Participating Country shall increase its actual level or emergency reserves to 90 days and shall endeavour to do so by the date so decided. 3. The term "emergency reserve commitment" means the emergency reserves equivalent to 60 days of net oil imports as set out in paragraph 1 and, from the date to be decided according to paragraph 2, to 90 days of net oil imports as set out in paragraph 2. Article 3 1. The emergency reserve commitment set out in Article 2 may be satisfied by -oil stocks -fuel switching capacity -stand-by oil production in accordance with the provisions of the Annex which forms an integral part of this Agreement. 2. The Governing Board shall, acting by majority, not later than July 1st, 1975, decide the extent to which the emergency reserve commitment may be satisfied by the elements mentioned in paragraph 1. Article 4 1. The Standing Group on Emergency Questions shall, on a continuing basis, review the effectiveness of the measures taken by each Participating Country to meet its emergency reserve commitment. 2. The Standing Group on Emergency Questions shall report to the Management Committee, which shall make proposals, as appropriate, to the Governing Board. The Governing Board may, acting by majority, adopt recommendations to Participating Countries. Article Chapter II. Demand Restraint 1. Each Participating Country shall at all times have ready a program of contingent oil demand restraint measures enabling it to reduce its rate of final consumption in accordance with Chapter IV. 2. The Standing Group on Emergency Questions shall, on a continuing basis, review and assess -each Participating Country's program of demand restraint measures, -the effectiveness of measures actually taken by each Participating Country. 3. The Standing Group on Emergency Questions shall report to the Management Committee, which shall make proposals, as appropriate, to the Governing Board. The Governing Board may, acting by majority, adopt recommendations to Participating Countries. Article 6 Chapter III. Allocation 1. Each Participating Country shall take the necessary measures in order that allocation of oil will be carried out pursuant to this Chapter and Chapter IV. 2. The Standing Group on Emergency Questions shall, on a continuing basis, review and assess each Participating Country's measures in order that allocation of oil will be carried out pursuant to this Chapter and Chapter IV, -the effectiveness of measures actually taken by each Participating Country. 3. The Standing Group on Emergency Questions shall report to the Management Committee, which shall make proposals, as appropriate, to the Governing Board. The Governing Board may, acting by majority, adopt recommendations to Participating Countries. 4. The Governing Board shall, acting by majority, decide promptly on the practical procedures for the allocation of oil and on the procedures and modalities for the participation of oil companies therein within the framework of this Agreement. Article 7 1. When allocation of oil is carried out pursuant to Article 13, 14, or 15, each Participating Country shall have a supply right equal to its permissible consumption less its emergency reserve drawdown obligation. 2. A Participating Country whose supply right exceeds the sum of its normal domestic production and actual net imports available during an emergency shall have an allocation right which entitles it to additional net imports equal to that excess. 3. A Participating Country in which the sum of normal domestic production and actual net imports available during an emergency exceeds its supply right shall have an allocation obligation which requires it to supply, directly or indirectly, the quantity of oil equal to that excess to other Participating Countries. This would not preclude any Participating Country from maintaining exports of oil to non-participating countries. 4. The term "permissible consumption" means the average daily rate of final consumption allowed when emergency demand restraint at the applicable level has been activated; possible further voluntary demand restraint by any Participating Country shall not affect its allocation right or obligation. |