MaltaToday
Front PageTop NewsEditorialOpinionInterview_LettersCulture
NEWS | Wednesday, 10 October 2007

Energy surcharge takes political dip

James Debono

A hike in global oil prices which should have led to a staggering 29.5% increase in the energy surcharge this month has not been reflected in consumers’ water and electricity bills.
For the first time since the introduction of the surcharge in 2005, the real increase in oil prices was not passed on to the consumer.
Last week the Investments Ministry announced that the surcharge for the next 60 days will remain at 50% despite a hefty increase in international oil prices. Instead, government will absorb Lm2.56 million of the surcharge to retain a stable rate.
It’s the first time since November 2005 that a sharp rise in oil prices has not been reflected in the subsidised rate.
A ministry spokesperson would not exclude that the present 50% rate will be retained in the coming months. “Such a decision will depend on the developments in the international oil markets over the coming months.”
The consumer will be paying the same amount when the unsubsidised surcharge was just 53.5%. At that time the unsubsidised surcharge was 29.5% lower than the present rate of 83%.
This was not the case in August, when the surcharge was increased by 5% to compensate for a 2.5% increase in the unsubsidised rate which applied between June and August.
Even more telling is that in summer 2006, when the unsubsidised surcharge was set at 81% – 2% lower than it is today – consumers were expected to pay a subsidised surcharge of 62%: 12% more than what they will be expected to pay in the next two months.
It is also clear that since March, the surcharge has not hovered above 50%, ensuring a degree of price stability before and after the favourable verdict from European Commission on Euro adoption.
The government may already be tinkering with the surcharge mechanism to the extent that for the first time, the consumer will not even feel the latest hike in oil prices. With an election approaching, the political implications are obvious.
The MIIT spokesman insisted that the overall aim of the government was always that of achieving a stable surcharge rate.


Any comments?
If you wish your comments to be published in our Letters pages please click the button below

Search:



MALTATODAY
BUSINESSTODAY
WEB

Archives


NEWS | Wednesday, 10 October 2007

Russian oil tycoon Kuzyaev’s secret birthday at Barrakka

New board to inspect detention centres monthly

MLP deputy dubs tax refund letters ‘cheap propaganda’

Rebecca in the lions’ den

Energy surcharge takes political dip

War on terror spreads to Malta’s global shipping fleet



Copyright © MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016, Malta, Europe
Managing editor Saviour Balzan | Tel. ++356 21382741 | Fax: ++356 21385075 | Email