Wednesday, 2nd July 2008
Surcharge set at 95%
Tariffs will reflect today's reality
Air conditioners now seem a luxury of the past as the surcharge on water and electricity bills was practically doubled to 95 per cent yesterday.
Fans are set to become all the rage as 82 per cent of households start paying higher bills, a predicament that will see families coughing up between €16 and €250 more each time they pay their bill.
Many people may have wiped their brow in relief at the news that, contrary to expectations, the surcharge did not climb to 115 per cent - the government is absorbing 20 per cent of the cost - but the increase will have a huge impact on family budgets.
The Infrastructure Ministry said yesterday that, conscious of the huge pressures the higher surcharge would have on consumers, the government raised its subsidy by 20 per cent from last October to September this year.
The government also wanted to protect vulnerable families, so that those with an energy benefit - about 30,000 households - will not be affected by the surcharge or will pay only a nominal amount.
The capping will remain unchanged for industry and hotels in order to lighten the impact and safeguard those sectors that generated jobs.
In a bid to soften the blow, the ministry pointed out that the previous 50 per cent surcharge had remained unchanged since last August, when the price of crude oil was $70, even though the cost continued to shoot up. In recent days the cost of crude oil hit a record $143 a barrel, leaving the government no option but to revise the surcharge - between last October and last month it forked out €37 million in subsidies.
"The time has come for the surcharge system to be replaced with new tariffs for water and electricity that reflect today's reality," the ministry said. A lot of work has been done on the structure of the new tariff scheme but the details have to be refined and the implications studied further.
Before introducing this radical system of new tariffs, the government wanted to consult the social partners within the Malta Council for Economic and Social Development so the surcharge mechanism will remain in place for the coming months.
The Federation of Industry last night warned of the adverse impact higher utility charges would have on industry.
It complained about the lack of consultation and said industry was already bearing the brunt of additional fuel costs when importing raw materials and exporting finished products, a situation that was making it less competitive than its counterparts on mainland Europe.
It also pointed out that governments had employed little effort in supporting enterprises in energy-efficient measures or in encouraging businesses to invest in alternative sources of energy.
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Comments
White goods with "A" ratings, the subsidy finishes this week!!!! Solar powered units have the most meagre subsidy in the Med.
In Cyprus all new builds must have Solar units on the roof, why not here. Why no solar powered street lights? Why no land based wind farms??? We are busy promoting "Smart City" pity it's in a country run by a "Dumb" Government!!!! Who can only see votes and are blind to the country's needs.
..........and yes I agree with Mr.Albert Bezzina 100%.......I think that the surcharge should be exempt not according to income but according to waste..............lets say if your bill is more than 40 euros a month you start paying with a surcharge of 25% and then this goes up and up according to water usage................so the surcharge rate would change according to "bands" ranging from 40euros up!!!
...........
Please give us more of the same. Your little ditty brought as much needed smile to my face while reading all this inevitable sturm und drang about a development that was bound to happen.
It has been reported recently by an energy adviser to President Bush, that by 2015 we can expect to be extracting 60 million or less barrels of oil a day. Thats 7 years from now! Today we demand at 86 mbd and production slightly less than that.
Wake up people, oil demand growth is growing yearly whilst production falters!
We also use oil to grow and transport food not just for Motor cars. A planet without oil or very little oil will not be able to support 7 billion people.
Houston, we have a very big problem indeed!
Hotels are exempt from the surcharge, however hundreds of families who host students will suffer this price hike. These families are also helping creating jobs for the tourist industry. If hotels are exempt then so should these families.
Where floweth oil for free,
No surcharge, bills, or taxes
Would, there, be paid by me.
Alas, on earth I'm living,
And have to toil for fee;
To pay my bills and taxes
And surcharge - where there be!
This "impending doom" of our oil running out is just a scare tactic. We knew about this fact 20 years ago. I remember learning in school, that one day, the oil will run out! But has anyone actually started thinking about implementing and real solutions for cost effective alternate energies??? hell no! Is it economically viable to turn your house into as much of a self-sustainable unit as possible? Well now... maybe. But i think that the govt should stop these subsidies and really push towards new energy sources. And i'm not saying just our govt as if its only a problem here in malta. This is a worldwide issue that the people in power have preferred not to address so that they dont step on any Oil Company toes and go in the bad books.
Another very clear case of corruption.
Why are you surprised?
Now I know that sounds like a dream, but surely the government can use the subsidy money create some good incentives, albeit on a smaller scale, for people to switch to renewable energy.
What the rest of us, who will be paying their bills would like to know is:
What is their energy and water consumption per occupant?
Are all occupants of these households unemployed and do not have another source of income?
How many have bothered to change to energy saving light bulbs?
What are their weekly expenditures on tobacco, alcohol and lottery tickets?
Do any of the occupants own a car and what type, age and fuel consumption figures does it have?
How many of these households have an airconditioner and more than one TV set?
Do members of these households go abroad more than once every 4 years?
How many mobile phones are owned within each of these households?
Some of this stuff can be easily checked out by legal Big Brother 'Orwellian' technology. Other information can be obtained by spot check sampling. After excluding these unknowns, energy and water consumption in these households should be capped, above which normal rates like the rest of us should apply.
Dr Austin Gatt, show us we are not working for social parasites and many will stop moaning.
How come you never mentioned anything regarding the other two questions?
PN are in Government and it is the Government who should come out with the figures in the first place.
Gonzi kept saying that the economy is doing well, in fact better then they anticipated, remember FINANZI FIS-SOD? Based on what Gonzi was saying, Labour were putting their options forward to put some dosh back into people’s pockets.
Looks like someone has been taken for a ride!
It's not just consumers versus dwindling oil supplies...
It's also consumers versus market speculators.
But more important: Who said before the election that the surcharge would remain on the same level after the election?
Okay, the election was already almost 4 months ago. But still, has the price for oil risen in the past few days only?
If the oil went of form 75 dollar to 150 dollar it doesnt mean it doubled since the dollar went down so much! Have a look at the Euro prices!
Dr Sant claimed to halve the surcharge but never mentioned from what percentage. On several occasions Minister Gatt challenged Dr Sant to explain himself but the latter, as usual, preferred to remain vague. You can refer to the back issues of The Times for evidence of this.
Also, you ask what would have been the cost to the exchequer with Labour's proposals. Maybe Dr Sant can table them in Parliament.
Why do you believe that none of this would have happened if Dr Sant was in power? Is the international community increasing the price of oil to embarrass Dr Gonzi? I hardly think so. The high costs of oil is a reality that we have to face regardless of who is in power. And we have no choice but to pay for it, directly or indirectly.
Finally. I'd rather have more money in my pocket and give some of it to Government. That still leaves me with more money in my pocket.
Its high time we get the ball rolling on alternative energy! Is it part of Vision 2015!!!!
How is the Government's surcharge formula worked out and what measures are used?
What has been the Government's overspend in the first 5 months of this year.
What would have been the cost to the exchequer with Labour's proposals?
Always bear in mind, that more money in people's pockets mean that some of it goes back into the Government's kitty.
The time may be near when each household will be self sufficient in producing its own electricity. This will be more environmental friendly and would be a big saving in our utility bills in the long run. A solar energy farm in uninhabited, non-fertile areas could help us save our national energy bills besides decreasing carbon dioxide emissions.