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Kurt Sansone
Motorists across Europe are bracing themselves for higher fuel prices as the cost of oil continued to soar this week with the price of a barrel of crude in New York hitting a record high of USD 44 and Brent crude in London rising to a 14-year high of USD 40.2 per barrel.
In Malta, motorists have already had a taste of the higher oil prices with Enemalta adjusting the price of fuel last month to the highest level ever. For the time being, motorists are shielded from the latest spate of crazy prices across Europe but if the price of oil continues to rise, Enemalta’s next fuel adjustment in three month’s time could very much reflect the crisis situation.
Currently the price of unleaded in Malta stands at EUR 0.89 per litre (38.6 cents per litre) while diesel stands at EUR 0.73 per litre (31.5 cents per litre).
Despite the last hefty increase, Malta’s fuel prices are still among the cheapest in Europe. A survey of average fuel prices in European countries performed in the month of July by the Automobile Association (AA) shows that unleaded petrol and diesel in Malta carry the second cheapest price tag among European countries.
Greece had the cheapest unleaded petrol at an average price of EUR 0.87 per litre. Spain and Malta were second cheapest at EUR 0.89 per litre. Motorists in the Netherlands had to pay the highest price for their unleaded petrol at EUR 1.25 per litre followed closely by UK motorists who had to pay EUR 1.22 per litre.
Diesel car owners in Luxembourg enjoyed the cheapest rate in Europe at EUR 0.68 per litre. Malta was second cheapest at EUR 0.73 per litre while the Greeks and Spaniards had to pay an average price of EUR 0.74 per litre. Diesel was most expensive in the UK at EUR 1.23 per litre followed by Norway at EUR 1.01 per litre.
The price of oil has literally gone berserk since 28 July with no sign of relenting. As the cartel of oil producers, OPEC announced that it was not yet in a position to increase supply in a bid to bring down prices. But the crisis is also fuelled by geopolitical uncertainty. The instability in Iraq, the court case in Russia which threatens to bring down oil giant Yukos and recent Al-Qaeda threats to target financial institutions are also contributing to the instability.
Only this week the Berlusconi government wrote to petroleum companies urging them to contain the prices of fuel in Italy. With unleaded and diesel reaching record highs in the neighbouring peninsula, the situation has started to have an impact on families.
Apart from having a direct impact on families with cars, the price of fuel has a creeping impact on the cost of living. Businesses faced with increasing company fuel bills will eventually pass on the cost to consumers. The price of fuel in Malta has seen a gradual increase over the last two years since government announced a new pricing mechanism linked to fluctuations in the international market. Prices are adjusted every three months and it is government’s intention to eventually bring the price of diesel on par with that of unleaded petrol.
kurt@newsworksltd.com
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