WEDNESDAY, MARCH 3, 1982
POWER COMPANIES TO MAINTAIN CURRENT RESERVE OIL LEVEL
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ON THE ADVICE OF THE EXECUTIVE COUNCIL BOTH THE HONG KONG ELECTRIC COMPANY AND THE CHINA LIGHT AND POWER COMPANY HAVE AGREED TO AIM TO MAINTAIN THE IR RESERVES OF FUEL OIL FOR GENERATING ELECTRICITY AT THE CURRENT LEVEL OF ABOUT 60 DAYS' SUPPLY DURING 1982.
THE PURPOSE OF THE RESERVES IS TO GUARD AGAINST A DISRUPTION IN SUPPLY.
FOLLOWING THE DECISION IN 1980 TO INCREASE THE RESERVES, A TOTAL OF 198 000 TONNES OF FUEL OIL WAS PURCHASED AND STORED ON THE TANKERS STRAITS DAHLIA AND SEABREEZE PENDING THE CONSTRUCTION OF NEW STORAGE TANKS ON LAMMA ISLAND AND AT CASTLE PEAK.
THE 198 000 TONNES OF FUEL OIL HAVE NOW BEEN PURCHASED BY THE POWER COMPANIES AT A PRICE OF $1 263 A TONNE WHICH, BECAUSE OF THE DECLINE IN THE EXCHANGE VALUE OF THE HONG KONG DOLLAR SINCE THE PURCHASE OF THE FLOATING RESERVES IN 1980, IS IN FACT SLIGHTLY LOWER THAN THE COST OF SIMILAR OIL BOUGHT ON THE SPOT MARKET AT THE END OF LAST YEAR (WHEN THE FLOATING RESERVES WERE BROUGHT ASHORE).
A GOVERNMENT SPOKESMAN SAID THE CARGOES WERE DISCHARGED AS SOON AS THE NEW LAND STORAGE FACILITIES OF THE POWER COMPANIES WERE COMPLETED, IN ORDER TO REDUCE THE COST TO CONSUMERS OF CHARTERING THE TANKERS. BOTH TANKERS WERE HANDED BACK TO THE IR OWNERS IN DECEMBER 1981.
AS ANNOUNCED IN 1980, THE STORAGE COSTS OF THE FLOATING RESERVES SCHEME HAVE BEEN MET THROUGH THE FUEL VARIATION CLAUSE OPERATED BY THE TWO POWER COMPANIES. IT IS ESTIMATED THAT THE STORAGE COSTS INVOLVED AMOUNT TO APPROXIMATELY $442 PER TONNE, AN ADDITION OF ROUGHLY 35 PER CENT TO THE BASIC COST OF THE FUEL OIL.
+TO HAVE CONTINUED TANKER STORAGE IN 1982 WOULD HAVE COST AT LEAST AS MUCH, WHILE THE EFFECT OF MAINTAINING AN EXTRA 30 DAYS SUPPLY OF FUEL OIL ON LAND IN 1982 WILL BE MUCH LESS,+ THE SPOKESMAN SAID.
THE SPOKESMAN SAID THE CHINA LIGHT AND POWER COMPANY AND THE HONG KONG ELECTRIC COMPANY ESTIMATED THAT THE COST OF THE LAND STORED RESERVES WOULD BE APPROXIMATELY 0.25 CENTS PER UNIT OF ELECTRICITY, OR ABOUT ONE-FIFTH THE COST OF MAINTAINING FLOATING RESERVES AND 0.5 PER CENT OF THE AVERAGE ELECTRICITY CHARGE PER UNIT AT PRESENT.
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