Enemalta buys oil for 2009 40 per cent lower than current price

Infrastructure Minister Austin Gatt yesterday confirmed that Enemalta has already bought part of its oil supplies for 2009 at 40 per cent below the current international price of oil - but that is still dearer than what the corporation is currently paying.

Answering a parliamentary question by Leo Brincat (MLP), Dr Gatt referred to what MLP leader Joseph Muscat was quoted to have said on Sunday and observed that had it not been for similar contracts made between late 2007 and early 2008 the surcharge today would have had to be 160 per cent, not the current 95 per cent. It was therefore obvious that the government and Enemalta had worked very wisely and defended consumers' interests as far as possible.

It was only because of careful forward buying by Enemalta, and because the government had increased its subsidy, that the surcharge could be kept at 95 per cent.

The jump in surcharge from 50 per cent appeared large because the government had chosen to keep the surcharge stable for the 11-month period between August 2007 and June 2008. Dr Muscat had been quoted as saying that it would have been better had the government raised the surcharge earlier, so that the difference would not have been so noticeable now.

Dr Gatt said Dr Muscat should know, because it has been repeated for years, that the surcharge is worked out only on the actual price paid for oil by Enemalta and no other consideration, such as the size of the corporation's workforce or the cost of its inefficiencies.

The MLP leader should know that the process of calculating the surcharge was agreed three years ago within the MCESD and had not changed since. This meant that there was no reason for holding further discussions because it was obvious that Enemalta was buying oil at a higher price than in July 2007.

On Dr Muscat's proposal of capping excise duty on diesel, Dr Gatt said he would have expected Dr Muscat, as an MEP, to know that the excise duty was a fixed quantity and not a percentage. This meant that the government did not stand to gain financially just because the price of oil was going up.

He would also have expected Dr Muscat to know that the EU imposed rules on both the level of VAT and excise duty.

Concluding, Dr Gatt said Dr Muscat had said nothing about how he would have kept his predecessor's promise of halving the surcharge. Between the election and the end of 2008 this measure alone, at today's oil prices, would have cost the country €79 million.