Government seeks fair 'burden-sharing' on oil

The government is busy working out how to share the burden of the oil price hikes fairly across different sectors, Tonio Fenech, the parliamentary secretary within the Finance Ministry, said yesterday.

The Cabinet has been discussing what measures to take in order to make up for a Lm50 million hole which Enemalta is expected to incur given the present oil prices and the way that prices may increase in the coming years, he said.

Making up for the increase through electricity bills would mean that the government would have to increase the surcharge introduced last year from 17 to 102 per cent. Other possibilities are putting the price of fuel at the pump up by 20c per litre or the government shouldering some of the burden itself by raising taxes or borrowing more.

"No decision has been taken yet," Mr Fenech said when asked if there were any indications as to which option the government was going for.

Mr Fenech explained that the Lm50 million figure had been worked out by estimating the electricity consumption and its increasing use in Malta, and the increased costs the country would incur when buying oil at the present price.

He said the government had also taken into consideration projections of the rise in oil prices in the years to come.

A decision on which should be the way forward is expected to be taken on Tuesday when the Cabinet meets again to continue discussions.