Forward buying

KPMG's total fuel cost was based on oil prices between October 1 and 24 but also included a further reduction of €30 million to mitigate for any further cut in the price of fuel.

There are two factors that could partially explain the difference in price between October and January.

The first factor is linked to Enemalta's oil requirements. Since the corporation does not buy in huge quantities, the price at which it buys may be slightly higher than the quoted international price.

The second factor is linked to the forward buying mechanism adopted by Enemalta. The forward buying rate is different from the spot market price. This could explain why consumers have not yet benefitted from falling oil prices because the corporation would still have old stocks bought at higher prices.

Otherwise, the difference in price is attributable to a reduction in international oil prices.

"Even when taking into consideration these two factors, the difference in price is so substantial that it warrants an explanation from Enemalta," a leading market analyst noted.

"If it has given us bad results the corporation should state what policy change it has made," he said.