Friday, 19th September 2008

Market price of crude oil in euros

Charles Caruana Carabez, St Julians

Why doesn't the government and the media start quoting the market price of crude oil in euros? The reason I am suggesting this is because even when the price was skyhigh, the dollar was extremely weak. The man in the street is led to believe that the price in dollars is the actual outflow of money incurred by whoever buys the oil in Europe. It isn't. What the government pays has been considerably less but our surcharge seems to reflect the dollar price.

The government should rack its brains to find its money some other way; fuel and energy are just too serious to too many people.

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Comments

Charles Caruana Carabez (on 20/9/08)

I kept my letter as short as possible, so further explanation may be required. The calculation of the surcharge in dollar-cost is misleading, for 2 reasons: When the price of crude shot up, the dollar crashed against the Euro. The Government pays in Euros, in real terms. The offsetting was quite dramatic lately. This was never pointed out, and the high price in dollars is always used to justify increases; we are not told that the rise is considerably less because of the strength of the Euro. Another thing I can't understand is why we are sometimes told we hedged the price, and at other times we are told the price has shot up. Last thing: is it legal to price commodities in foreign currencies?

Rory O'Neill (on 19/9/08)

Charles Caruana Carabez.

You are so right. Politicians should have there nappies changed regulary,for all the usual reasons!!!!!!

J Martinelli (on 19/9/08)

Can anyone explain the difference in value of a barrel of oil, be it bought with euros, dollars pesos or the sterling?

Whether the surcharge is calculated on the dollar price, or the Mexican peso, it makes no difference! The amount of surcharge would be exactly the same.

If the price of electricity remains the same, Then Mr. Charles Caruana Carabez is 100% correct - the government should find its money some other way. The other way is taxes - no need to rack brains.

Bottom line is - subsidies are out and consumers will, for the first time, start paying what it actually costs.

apgrech (on 19/9/08)

Will we ever see the day when the world will be governed by honest people?

Edward Zammit (on 19/9/08)

Back in time The U.S. made a contract with the African and Asian O.P.E.C. countries to buy a majority of their oil and thr condition for that was that these countries had to sell all of their oil in USD. Thus the mess we have to-day. If only Iran would make it's threat to the US true and sell it's oil in Euros.

Joseph Zammit (on 19/9/08)

mr grech, you're right, it worked for the govt when the price was going up, but now they'll have a hard time explaining to the man in the street that the price isn't going down in euro terms.

apgrech (on 19/9/08)

I don't think Tonio Fenech will be happy with your proposal since you have exposed one of the tricks government is using to inflate the surcharge.