XN000022-1974-04-10 — Page 5

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NEED FOR CONSERVING FUEL OIL UNDERLINED

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UNOFFICIAL MEMBERS OF THE LEGISLATIVE COUNCIL TODAY EMPHASIS- ED THE NEED FOR ECONOMISING ON THE USE OF FUEL OIL AND FOR FINDING NEW SOURCES OF OIL SUPPLIES DURING THE ADJOURNMENT DEBATE IN THE LEGISLATIVE COUNCIL ON MEASURES TO DEAL WITH THE WORLD FUEL OIL PROBLEM AS IT AFFECTS HONG KONG.

LEADING THE DEBATE, THE HON LEE QUO-VEI SAID THAT THE CON- CLUSION OF AN AGREEMENT WITH CHINA FOR THE PROVISION OF CERTAIN QUANTITIES OF PETROLEUM PRODUCTS +HUST BE CONSIDERED A MEANING- FUL CONTRIBUTION.

MR. LEE SAID THE SINGLE MOST SERIOUS EFFECT OF THE OIL CRISIS IN HONG KONG HAD BEEN THE DRAMATIC INCREASE IN THE COST OF OIL IMPORTS OVER THE LAST FEW MONTHS.

POINTING OUT THAT THIS WAS A DIRECT RESULT OF DECISIONS BY THE PRODUCER GOVERNMENTS TO RAISE THE CRUDE OIL PRICES BY OVER 200 PER CENT, HE SAID THAT DESPITE THE MANY EFFORTS OF THE LOCAL INDUSTRIAL CONSUMERS AND THE GENERAL PUBLIC TO CONSERVE ENERGY THERE WAS LITTLE THAT COULD BE DONE IN THE SHORT TERM TO ALLEVIATE THE EFFECT OF THE PRICE INCREASES.

AS THE PROBLEM OF BOTH THE SUPPLY AND PRICE WAS NOT EASY FOR HONG KONG TO SOLVE ALONE, HE STRESSED THE IMPORTANCE OF · CONSERVATION AND ECONOMY, PARTICULARLY WITH THE APPROACH OF THE SUMMER MONTHS WHEN ELECTRICITY DEMAND WOULD BE AT ITS PEAK.

MR. LEE SUGGESTED THAT THE GOVERNMENT SHOULD PUBLICISE HOW TO AVOID WASTAGE AND TO ACHIEVE OPTIMUM UTILIZATION AND ECONOMY, SO THAT THE WHOLE COMMUNITY COULD CO-OPERATE WITH GOVERNMENT IN ITS EFFORTS TO PREPARE FOR ANY FUTURE CONTINGENCY.

+THIS IS PARTICULARLY IMPORTANT TO OUR BALANCE OF PAYMENT CONSIDERATIONS AND FOR KEEPING OUR DOMESTIC PRODUCTS COSTS REASONABLE SO AS TO PRESERVE OUR COMPETITIVE POSITION IN THE WORLD MARKETS.+

SHOULD THE CAMPAIGN PROVE TO BE EFFECTIVE, HE ADDED, IT WOULD NOT BE NECESSARY FOR THE GOVERNMENT TO CONTINUE WITH THE IMPOSITION OF THE RESTRICTIONS, OR AT LEAST SOME OF THEM, NOW IN FORCE.

MR. LEE WARNED THAT ALTHOUGH MOST OIL DESTINATION EMBARGOES HAD FUR THE TIME BEING BEEN LIFTED BY THE ARAB PRODUCER STATES UNTIL JUNE THIS YEAR, HONG KONG MUST NOT BE LULLED INTO THE BELIEF THAT THE SITUATION HAD NOW RETURNED TO NORMAL.

+ACTUALLY, THE OIL INDUSTRY HAS NEVER FACED SO MUCH UNCERT- AINTY AS IT DOES TODAY. IT IS GENERALLY ACCEPTED OIL PRODUCTION LEVELS STILL REMAIN INADEQUATE TO MEET UNRESTRAINED GLOBAL DEMAND, + HE COMMENTED.

HE ALSO FELT THAT IT WAS BY NO MEANS CERTAIN THAT THE GOVERNMENTS OF OIL PRODUCING COUNTRIES WOULD AGREE TO INCREASE PRODUCTION IN LINE WITH THE INCREASE OF WORLD DEMAND.

+AS TO PRICES, IT MUST NOT BE TOO, OPTIMISTIC THAT THEY WILL COME DOWN, UNLESS THE RATE OF WORLD-WIDE INFLATION CAN BE EFFECTIVELY CHECKED,+ HE ADDED.

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