Editorial

As it has well been expected, and as the government has been saying for some time now, the electricity surcharge has been raised from 50 per cent to 95 per cent. The rise is big enough to dent the budget of many households, setting in a period of retrenchment.

The government has a strong case, arguing that, in the light of the spiralling cost of crude oil, it has no way out of the situation. Yes, it could have raised the subsidy, as some have suggested, but Infrastructure Minister Austin Gatt had a very valid point when he said in Parliament that subsidies had to be paid out of taxes.

Oil industry analysts believe it is highly unlikely that the price of crude will come down again, at least to levels known in recent past. This has already led many countries to step up their efforts to tap traditional and new alternative energy sources. However, since Malta's alternative energy programme is still far way off from making any significant contribution to the total energy output, the country has yet to rely exclusively on oil to keep the wheels of the economy turning. And since the island has no oil or gas resources of its own it would have to buy all its fuel requirement.

With the rapid expansion of manufacturing industry and tourism, the demand for oil has risen sharply. According to the latest figures, given by the National Office of Statistics, the rise in demand was 17 per cent over eight years. About 60 per cent of fuels (fuel oils) are used for electricity production and another 34 per cent of the total fuel share (diesel, gas oil, unleaded, jet fuel) is taken by the public and private transportation.

Gross energy consumption rose by 19 per cent between 2000 and 2006, with the domestic sector taking about 36 per cent of total electricity consumption.

As the minister remarked in Parliament, the rise in tariffs will not make the government popular today.

Yet, it is better for the country to face up to the new challenges which the rising price of crude oil is presenting than just resort to patching up difficulties with measures that will compound the problem. Escalating prices may well mean changes in lifestyle, something many would obviously hate to do at first.

However, there is a highly effective measure that can be taken and that is of benefit to consumers and the country alike: Saving on energy. One of the oil giants, Chevron, never stops highlighting the importance of this point in its advertisements in international media.

There is a positive note in all this: Despite all the grumbling that goes on every time the government raises the energy rates, the truth of the matter is that many are in fact already resorting to saving on energy in their homes. In fact, one survey, carried out some time ago, showed that 71 per cent of respondents were cutting down on the use of lighting and domestic appliances, including air conditioners. The EU average was 48 per cent.

Tapping alternative energy sources - something the government has been very slow in doing - and saving and conservation are all measures well worth taking but the island has to make up for the sharp rise in the price of crude oil through greater efforts at speeding up economic activity.