XN000022-1973-12-11 — Page 23

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Tuesday, December 11, 1973

I come now to oil and its products. I need not outline the

background of our present problem of oil supply and storage, since events

in the Middle East have filled our newspapers in recent weeks, and you

are all aware of the potential gravity of an interrupted flow of oil to

Hong Kong. Again we must rely on outside sources and are largely dependent on

the skill of our buyers and suppliers to obtain a fair share of the ofl.

products that we need, But what your Government can do I assure you it

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is doing, and it is in close touch with Her Majesty's Government and other

Governments, I should like to mention the helpful and sympathetic attitude

of Her Majesty's Government and of the Chinese Government.

The world shortage in oil could affect us in various ways, Firstly,

and most directly and immediately, supplies for consumption in Hong Kong

could and probably will be reduced. In the first place every one of us

must do what he can to help reduce demand. Substantial savings can be

made simply by reducing waste. At this point in time, it is impossible.

to judge whether we in Hong Kong are going to face seriously reduced

supplies of oil and oil products. But we think it prudent to achieve a

reduction in consumption of 10-15% now, in anticipation of reduction in

supplies later. If reduction in supplies is of this magnitude we may expect

personal inconvenience rather than economic damage to result. But damage

could come from the less direct impact of the world shortage.

For instance, in the medium term, world oil shortage must affect

our supply of oil-based raw materials certainly as to price and probably

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as to volume. The first need not necessarily affect our competitive position

but the second couldaffect our earnings.

/Furthermore