Power surcharge to shoot up to 67.5 per cent

The electricity surcharge is expected to soar to 67.5 per cent, as the government grapples with rocketing oil prices.

The increase - up from 47.4 per cent - will be applicable between March 1 and April 30 and is expected to be announced tomorrow, The Sunday Times has learnt.

The government had unveiled a surcharge of 55 per cent last October to cushion the impact of spiralling oil prices, with an additional 1.2 per cent to be levied monthly every month as from January.

"The increases in oil prices in the last two months are expected to impact the surcharge," a spokesman for the Investments Ministry said. He did not wish to give further comments.

It is not yet known whether there will be any change in the prices of petroleum products.

The increase is the third surcharge shift since the beginning of 2005. The government had initially levied a 17 per cent surcharge, which was controversially revised to 55 per cent last November after international oil prices spiralled out of control. The surcharge was subsequently revised downwards by 10 per cent last December.

Oil prices once again reached $60 a barrel on Friday, marking an increase of almost eight per cent so far in 2006. This has been attributed to market concerns over supply disruption from Nigeria and the uncertainty of oil production from Iran. A Saudi oil refinery was the target of a failed Al-Qaeda terrorist attack on Friday, raising oil prices by a further $2 per barrel.

Figures released by Eurostat last week showed that electricity prices increased in nearly all EU member states between July 2004 and July 2005.

The price of electricity for households in Malta was actually the fifth cheapest in the EU as at last July, though the ranking would have evidently shifted after the increase in the surcharge last November.

The government and Enemalta are this year footing Lm31.2 million in fuel costs while the new surcharge rate, the subsequent adjustments and the new excise duty on petrol are expected to raise about Lm33 million from consumers.