Wednesday, 2nd July 2008 - 16:59CET
Decisions on surcharge, fuel, cannot be reversed, GRTU told
The GRTU said today it had had a meeting with the Prime Minister during which Dr Gonzi explained in detail why the government had to raise the power surcharge and why, in current circumstances it could not neither reverse its decision on the surcharge nor reduce duties on diesel.
The GRTU delegation, led by president Paul Abela and director-general Vince Farrugia, expressed its concerns about the power and fuel costs and reiterated its call for the government to reduce duty on diesel which, it said, was yielding revenue of €90m annually. The delegation warned that such increases would fuel inflation.
Dr Gonzi said the government would consider the situation of any sector which could not cope with the current circumstances, but he said Malta could not respond to a situation caused by factors abroad by taking measures which would cause it financial problems in the future.
He said the current system of capping on the power surcharge could not be changed because it would lead to job losses.
The GRTU said it would be holding meetings with its various sections on the impact of the energy prices so that the best solutions could be discussed with the government.
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Which is ironic, considering that heavy industry (including the largest single electricity consumer- WSC) benefits from the economies of scale necessary to make investments in energy-efficiency and renewables.
But ST's recent threat (blackmail?) has probably forced government to shy away from making any bold but necessary changes in the surcharge for these sector - with the result with the rest of the country will continue subsidising our heavy industry to the tune of tens of millions of euros a year.
Let us not forget that industry in Malta already benefits from subsidised water (or free groundwater), no sewerage charges on discharge, subsidised waste disposal fees, tax free holidays, etc...... and only pay a third of the cost of producing each and every unit of electricity these huge consumers guzzle up.
Are we on the way to making another Drydocks out of our manufacturing industry?
At the same time capping is to remain we are dogmatically told, as it would lead to job losses. Do we have to take this a bible truth? Capping only benefits the larger industrialists / hoteliers.
My view is that a happy medium should be applied. Capping should be abolished but the price of fuel reduced by the government, thus retaining flat income from the fuel tax as it was before the increase in fuel prices. As it is the government blames the Sheiks when fuel price increases while at the same time conveniently increasing its revenue, which I understand is worked out as a percentage of the gross price. The only losers are the consumers.