Although the surcharge imposed on electricity and water consumption should be coming up for review since the six month time frame announced in the budget has elapsed, a spokesperson for the Investments Ministry yesterday would not commit himself on when the decision will be taken.
“The Government will announce any decision on the matter if and when it takes one,” was the curt reply given to The Malta Financial and Business Times.
The reply opens up the possibility that Government may not even take a decision on the matter.
In the budget, Prime Minister Lawrence Gonzi said that the 17 per cent surcharge would be reviewed every six months to reflect the international market price of fuel oil, the fuel used by Enemalta to operate the power stations.
Gonzi had even suggested the surcharge decrease if Enemalta’s fuel bill was reduced.
But an analysis carried out by sister publication MaltaToday of spot prices based on the Platts Mediterranean Cargoes FOB indicator shows that the average monthly price of Light Sulphur Fuel Oil (LSFO) has risen from USD29.83 per barrel in January to USD37.42 per barrel in May.
Taking into consideration the US dollar to Malta Lira exchange rate the price per barrel for LSFO has increased from Lm9.82 in January to Lm12.65 in May.
According to the oil market report issued by the International Energy Agency the price of LSFO increased to a high of Lm13.23 per barrel in April as refineries in Europe were closed because of maintenance. But the price failed to drop significantly since in the Mediterranean basin demand for LSFO remained high because of lower hydro-electric power generated in some countries because of lower reservoir levels.
The situation is further aggravated by the gradual strengthening of the US dollar against the Malta Lira, which makes oil product purchases by Enemalta all the more expensive.
All pointers indicate that the fuel surcharge is set to increase and the situation is made worse by the lack of efficiency at Enemalta, which is a major contributor to the corporation’s losses.