06 April 2005

The Web

Subsidy on diesel completely removed
By Kurt Sansone

With the consumer price of petrol no longer subsidising the price of diesel as of 1 January this year, motorists can hope for the price of diesel to stabilise in the region it stands today, after the gradual subsidy removal over the past four years contributed heavily to the hefty price hikes in the fuel used mainly by the commercial sector.
In the latest fuel adjustment bulletin issued by Enemalta the price of diesel was increased by 0.8 cents with the pump price now reading 36c7 per litre (EUR0.85 per litre).
In the past the consumer price of diesel was kept artificially low with Enemalta subsidising the fuel through a price hike in petrol. But over the past four years that subsidy has been gradually removed and the price of diesel today is a far cry from the 20 cents per litre it was in 2001. The petrol-diesel subsidy came to an end in December last year and from now on any increase in the price of diesel will be solely due to fluctuations in the international price.
Since 2001, when Enemalta liberalised the price of fuel, world markets have seen the price of diesel jump up by 52 per cent in Maltese Lira terms while that of unleaded petrol increased by 21.9 per cent.
As things stand it is likely that diesel prices will still go up in the months to come but the rate of increase will be less than that experienced over the past four years giving industry a chance to better plan its fuel requirements.
Enemalta’s latest fuel bulletin established a new price for unleaded petrol, which now stands at 38c1 per litre (EUR0.88 per litre) an increase of 0.6 cents over the price for the previous quarter.
In January this year Enemalta started importing diesel and petrol with lower sulphur content, which also contributed to the price hike in the first quarter since both fuels are much more expensive than the fuel imported by the parastatal company up to December.
Compared to fuel prices in other European countries surveyed by the Automobile Association, Maltese motorists seem to be getting a good deal from the pumps. At EUR0.85 per litre diesel in Malta is among the cheapest in Europe. Only motorists in Portugal, Spain, Greece and Luxembourg get their diesel at cheaper prices.
Unleaded petrol in Malta is also on the cheapest rungs with only Czech and Greek motorists getting the fuel cheaper than their Maltese counterparts.

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