Clive Demicoli, St Julians.
Halving the surcharge
I do have a little trouble understanding Labour's proposal on halving the surcharge. If almost 30,000 low income families are already exempt from paying the surcharge on their water and electricity bills, how can the Labour Party tell us that this proposal is a fair one? Where is the social soul of the Malta Labour Party, a supposedly socialist party?
This proposal doesn't help the low income earner. It doesn't help Maltese industry be more competitive as Alfred Sant finally remembered to tell us that it does not apply to businesses. It doesn't help curb electricity wastage. Why is it being proposed?
And what happens if the price of oil keeps going up? Will it remain halved? Or will Dr Sant say that the situation has changed, maybe leaving the surcharge as it is and raising the rates?
Doesn't all this mean that in reality the halving of the electricity surcharge is just an electoral gimmick, in the same vein as the 1996 promise to remove VAT?
Popular Stories
In Discussion
6 Comments
Post comment
Please sign in or create your Account to post comments.
Chris Scerri
Feb 18th 2008, 20:37
Since its introduction, the surcharge has changed only marginally and thus it is reflecting the actual changes in the price of oil. Even if we look at the differences from 2004, the oil price increased by 150% whilst the Dollar fell by around 9% so the actual increase in the price of oil was 127%. My reasoning still holds.
As for alternative energy, whilst I am all for RES, one has to understand that RES is not a free energy but in fact costs more or less like the price of electricty with surcharge.
One can easily calculate - a 2Kw photovoltaic system has a payback of around 20 years and a lifetime of around 20 years - that is you get your money back as savings from electricity in the same time that you come to change your system. So RES is good for the environment but not directly for the pocket. As for hedging this is good for peaks in the price not when the price keeps on increasing as happened since 1997!
William England
Feb 18th 2008, 17:09
Chris, your calculation is wrong! You do not have to compare it to 1997 but to the date the surcharge was introduced! It is true that we are living in a global village even though it does not feel like itdue of the travel restrictions caused by the unfair departure tax. 1. With an early introduction of hedging agreements we would have been able to cut off the peaks of the oil price surge 2. Before we joined Europe we were not even allowed to use alternative energy. 3. During the past 20 years Government did nothing to look into other sources of energy. What I cannot accept are things like "we can do very little" or "in Malta things are different" etc.
Chris Scerri
Feb 18th 2008, 16:11
The argument of the fall of the Dollar does not really hold water. From 1997 till 2004 the dollar/Lm rate dropped by 23% and has remained approximately the same since then (you can check these with the Central Bank's historic rates).
On the other hand the cost of a barrel of oil from 1997 till 2007 increased by a whopping 733%! So the actual increase is of around 576%! Thus if the calculation of the surcharge was just a simple calculation, then it should have been over 500% and not 45%! Let us admit it, we are livig in a global village and any changes out there affect us, and we can do very little to change that.
Keith D'Amato
Feb 18th 2008, 12:43
Yep, It's the same as before.
Deja vu Labour
Damian Vella
Feb 18th 2008, 12:02
Hi,
please do not forget that:
1. The price of oil exploded in Dollar terms BUT remained nearly in unchanged in Euro due to the sharp drop of the dollar!
2. A price increase of x% of the oil does NOT translate into x% more expensive electricity as some politicians try to make us think!
3. Labour cost, machinery etc does not increase in price if the oil goes up.
Considering those things a lower surcharge is very likely if properly calculated!
Joe Bonello
Feb 18th 2008, 11:51
Halving the surcharge is only an election gimmick. Definitely no social conscience. How can one explain that if you can afford to 'waste' energy and now pay a surcharge of say €2000 - a Labour Government would 'subsidise' you by €1000 whereas a low income family (who is not being charged any surcharge) gets nothing! The more energy you 'waste' the more subsidy you get! Did you say social conscience?