Surcharge lowest in 18 months

The surcharge on utility bills has been slashed by another nine percentage points to 45 per cent, the lowest level in a year-and-a-half.

The revised surcharge has been spread over three months, March to May, rather than the usual two, "thanks to Enemalta's diligent strategy of fuel purchasing", according to the Investments Ministry.

The revision marks a reduction of 22.5 percentage points from that in the same period last year.

The ministry said the three-month period of the surcharge was a one-off and would continue to stabilise water and electricity prices.

Enemalta Corporation bases the surcharge on the international price of oil in the months prior to the revision. The surcharge reflects also the US dollar exchange rate.

Though the international price of fuels is still considered high, there has been a drop in recent months. In the beginning of 2006 oil was selling at $345 a ton but went down to an average $265 in the last three months of the year, now reaching $245 a ton.

The ministry attributed the downward trend to the work of the Fuel Procurement Advisory Committee appointed by the government.

The reduction was a step in the right direction for a number of reasons, Vince Farrugia, director general of the Chamber for Small and Medium Enterprises - GRTU, believes. The surcharge, Mr Farrugia said, is one of the most influential factors determining the rate of inflation, and any upward trend at this delicate stage could derail Malta's entry into the eurozone.

"The surcharge is distorting the country's economic indicators. It would not be right for Brussels to ignore the restructuring which has taken place in all the other aspects of the economy," he said.

The reduction will also have an economic impact since a lot of sectors are dependent on electricity, he explained, adding that a three-month stable period would help operators plan better.

The price of unleaded petrol, lead replacement petrol, diesel and light heating oil will remain unchanged until the end of this month.

Fuel surcharge