Government urged to postpone revision of utility rates
The Malta Employers’ Association has called on the government to postpone any plans to revise utility rates until March 2009.
The association stressed that the business community was already facing considerable uncertainty because of a drop in order books caused by the international recession, and such uncertainty should not be exacerbated by an increase in electricity charges.
“The world economy is in a state of flux: a fluctuation in oil prices which has not been experienced in decades; a collapse in financial institutions that hark back to the Great Depression; and crumbling consumer confidence that is creating havoc in consumer and business markets alike. Proceeding with drastic changes in utility rates at this stage is like running in a fog, and it would be wiser to wait until the dust settles before taking any action,” the MEA said.
It pointed out that these international developments were manifesting themselves locally.
The announcement that Trelleborg would operate on a four-day week was the first sign that Malta will be affected by the ripple effects of the unstable international climate. Other major companies were also considering similar measures. Hotels were likewise reeling from the negative impact of reduced bookings and cancellations from important markets.
“In such circumstances, the best option is to shift the target of a balanced budget to the back burner and focus on shielding industries from the global crisis. This is clearly what other governments are doing and is manifestly expressed by the leaders of major economies in the outcome of the EU summit held this week,” the MEA said.
Safeguarding jobs and investment should rank higher on the list of national priorities than balancing Enemalta’s books.
The social partners should use the time available to prepare their studies for a measured and studied response to the domestic and global situation which would also reflect the developments in the international economy at that stage.
Earlier, the GRTU insisted that the new water and electricity tariffs which will replace the surcharge should not push bills any higher than what they are today.
In a statement the chamber appealed to the government to withdraw its proposed the water and electricity tariffs, saying they did not reflect the country’s real needs and were badly drawn up.
The GRTU said that as a matter of principle, it did not agree with the government which seemed to have decided that this issue was only one which concerned Enemalta and the Water Services Corporation.
It was the government’s responsibility to see that the country had an adequate supply of energy at a fair price. It should look at the problem globally and ensure that the community was not burdened with payments it could not afford.
Furthermore, the tariffs should not be based on an oil price of $100 per barrel but on a 20-year average oil price. Moreover, they should continue to include a surcharge which would go up and down according to circumstances.
The new rates should be multi-tier with peak time, low time and intermediate time tariffs. Consumers should also have the choice of binding their tariff for a year.
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s.bugeja
Oct 18th 2008, 08:03
The government has several ways to reduce electricity consumption and production.
1. It should launch a vast project whereby rain water is collected thus saving fuel on reverse osmosis operation. millions of litres of water are wasted during winter as rain water finds its way to the sea.
2. another project should focus on alternative energy such as solar, wind and wave energy sources. three elements which are not lacking in malta yet being given next to no importance by the government. The government could install photovaltic cells on the roofs of its departments, schools and other public buildings as a source of energy to the surrounding areas.
Incentives to those who use energy sensibly should be substantial. these could take the form of subsidies on solar power heaters on private roofs.
A Camilleri
Oct 17th 2008, 23:10
@Paul Barrett. It may not be pratical to use the vaccum cleaner at night, but it would be feasible to use the water boiler (which uses far more electricity unit than a vaccuum cleaner).
@Mark Piscopo. Against which period (year) are you comparing your electricity bill? It is mathematically impossible for the bill to have doubled solely as a result of the increase in surcharge from 50% to 95%.
l Galea
Oct 17th 2008, 20:54
R. Scicluna
Turbines have to have a load nearing their maximum capacity to work efficiently.
Therefore, when there is a low load, such as late evening and during the night, turbines will still have to be kept operating in order to meet the demand.
So instead of using the same amount of oil to have the turbine delivering half or whatever load is demanded, people are encouraged to use electricity during periods of low demand.
e.g. say the load required is 120MW and you have turbines of 100MW each.
You will have to have two turbines operating at nearly half load, but you must still have the two to meet the demand.
So encourage people to use electricity when the demand is low to maximize efficiency.
Hope this explains it.
Ivan Brincat
Oct 17th 2008, 20:46
Maybe it is high time that the Government tells taxpayers at what price oil was hedged and when will we see pass through in prices. And while we are at it, I would also like to ask whether Airmalta has also bought fuel at hedged prices and whether we can expect a decrease in the fuel surcharge quite soon.
Nigel Lawrence
Oct 17th 2008, 20:30
These tariffs are nothing to do with the price of oil, they have been put in place to bail out Enemalta's incompetence and mismanagement of financial matters.
Ethelbert Schembri
Oct 17th 2008, 19:47
We are the only place in the world that the GOV is doing nothing against the recession and more it is planning to introduce the rates that will devastate all industry sector.
Instead of pumping money in the economy the GOV is just playing with words by simply saying how good is the GOV and that with him in power the recession will not hit MALTA .
Well wake up from the dreams Dr GONZI and Co cause we are not just hit but already sinking !!!
Paul Barrett
Oct 17th 2008, 19:34
@ R. Scicluna
Basically the meter is different, it has a clock and two readings. It depends on how the rules are written but say night from 11pm until 6am you are charged at a slightly lower rate and Day from 6am until 11pm you are charged at a very much higher rate. I have not come across the intermediate rate in a domestic situation.
The idea is that you use your washing machine at night when elec is cheaper and the reason it is cheaper is that the power station has to run anyway but their is less demand. It was mostly taken up in the UK to power storage heaters, they would burn elec at night storing the heat until the next evening, it did not work well as by the time you needed them, they were virtually cold.
As very few people have storage heaters in Malta, apart from running air conditioners at night, the system would be fairly useless unless you sleep during the day and work at night. It might upset a few neighbors as well if you start using power tools and vacuum cleaners etc between 11pm and 6am.
E Camilleri
Oct 17th 2008, 18:55
Why is it that no one seems to discuss ways on how to reduce energy consumption and thus pollution? Oil is not going to be cheaper in the future, especially with the fact that demand is on the increase whilst Oil is a finite resource which will decrease in the near future.
R Axisa
Oct 17th 2008, 17:48
Price of oil is at the moment at its lowest level for the past months - USD 70 per barrel. How come there was no price adjustment for fuel in this regard?? When the oil prices went sky high, the govt was quick enough to increase the local price for fuel with immediate effect - now prices have changed downwards but we had no downward price adjustment. To add insult to injury, we are even talking about increasing the water and elect tariffs. Unbelievable!!
I think I'm getting convinced that it's all being done to balance the govt public accounts.
R. Scicluna
Oct 17th 2008, 17:21
For my own knowledge, can someone explain how the multi-tier with peak time, low time and intermediate time tariffs work? Does oil cost less at nighttime? I know the system is used some places abroad but how does it actually work?
tks
Mark Piscopo
Oct 17th 2008, 17:19
I have just received the bill with the 95% surcharge, I do not know how I will pay it because it is twice the amount I usually payed. If the government introduce higher rates it will sure put my family and I in real crisis. Hope that all the unions and the opposition will continue to do the pressure so that our government will not introduce higher rates.
Paul Barrett
Oct 17th 2008, 17:17
I concur with the Malta Employers' Association and the GRTU - but Elec and Water should be left at the price it was 20 years ago..
On the same lines the Association should double employees pay and the GRTU members should sell everything at half of what it cost their members to produce - for that is what they are asking for.
victor caruana
Oct 17th 2008, 17:14
Someone must be joking!!!!!. Yes, the tariffs should be revised down to reflect current oil prices which are bound to dip further by year end!!!!!!!!!!!
T.Grima
Oct 17th 2008, 17:07
I suspect that the new tariffs are a fait accompli and that nothing and no one will sway the government from its decision. We shall start seeing the effects by early 2009.
David Gatt
Oct 17th 2008, 16:39
These new tariffs are a tragedy. I really hope that the PM wakes up and realizes what he's about to cause.