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Kurt Sansone
Government is seriously considering all options, including raising water and electricity tariffs to stave off the negative impact climbing oil prices are having on public finances, Parliamentary Secretary Tonio Fenech told MaltaToday.
In the wake of crazy oil prices that hit another record high on Friday at USD55 a barrel, Fenech said the cut-off point that would spur government to consider raising water and electricity tariffs had already been surpassed.
In an interview with MaltaToday (see pages 16, 17) the Parliamentary Secretary insisted that at this point government was “seriously considering everything.”
“The situation is what it is and government is considering all its options on how best to conserve energy while honouring its social and economic obligations. We cannot ignore the oil price pressures on the manufacturing industry or the social reality but we also cannot ignore the fact that the price of oil has doubled since last year. This is a burden shouldered by Enemalta and eventually by all tax payers,” Fenech said.
The oil crisis, which is not expected to relent any time soon, will probably constrain Prime Minister Lawrence Gonzi and his junior minister of Finance to write and re-write parts of the budget up to the very last minute. Parliamentary Secretary Tonio Fenech said: “Oil forms an integral part of our cost of production and the higher prices are having an impact on the country’s competitiveness. It also increases the cost of production for Enemalta in relation to energy generation.
“Our indications are that for this year Enemalta would have to absorb Lm5 million in additional expenses if it is to keep electricity rates as they are. The problem will only be made worse if prices continue to rise.”
The Investments Ministry, whose remit includes Enemalta, is currently studying various options on how best to address the problem and a major concern seems to be the level of consumption.
Fenech insisted people have to be aware that consumption is heavily subsidised.
“Wastage of electricity is a burden on the country. Even if we had to raise the price of utilities to match the cost of production wastage is never justified. Unlimited consumption will have a negative impact on the country’s balance of payments. More money will leave the country, further impoverishing the economy,” he said.
Prime Minister Gonzi also made reference to the oil crisis yesterday during a question and answer session on Radio 101. Gonzi expressed his concern on the situation and said higher oil prices threaten to wipe out the little progress registered in public finances.
kurt@newsworksltd.com
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