02 APRIL 2003

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Iraq crisis rollercoasters oil prices world-wide, but Malta keeps prices stable

The Ministry for Economic Services yesterday announced that there would be no adjustment in the prices of oil products in the coming three months, due to the ‘abnormal and exceptional circumstances’ arising due to the war in Iraq.
This means that diesel, unleaded petrol, lead replacement petrol and kerosene prices will not be adjusted.
The decision has postponed the recent adjustment introduced at the start of 2002 for prices of oil in Malta to reflect the movement in prices of oil in the international market.
The formula started being used first during April 2002 and was subsequently applied every three months, last of which having been January 2003, when the price of petrol decreased whilst diesel increased.
In its communication, the Ministry said the formula used to adjust local prices to international movements in oil prices had not been calculated for exceptional contexts such as the current conflict.
In the last few weeks, news of debacles being encountered by the coalition forces of the US-UK troops have sent the oil prices fluctuating. Initial speculation that the war would be curt and not costly actually had the oil prices remaining stable, until the first signs of trouble in Iraq started budging the barrel prices.
Prices had initially risen to tension-fuelled heights on the eve of the great conflict. The Ministry said prices were now expected to take a nose-dive.
The Ministry has said it would not be a realistic measure to apply in such volatile conditions, the automatic and mechanical application of the formula. The calculation will be based on six months of activity, until when the situation would have stabilised itself.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
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