Oil hedging left balance of $10.7m - Enemalta

Enemalta said this afternoon that its hedging of oil prices over the past 15 months had kept electricity tariffs stable and left a positive balance of $10.7 million.

The corporation published a 15-month account of its profits and losses as a result of hedging. It said it had a positive balance in the first months as oil prices rose. The $46m profit made during this period was used to keep the surcharge lower than it would have been without hedging.

As oil prices collapsed over the past four months, the profit made in the previous months was almost completely eclipsed.

"It is clear, however, that at no time did hedging keep electricity bills higher than they should have been," the corporation said.

The figures show that while Enemalta saved $9.3 million on oil purchases in June and $7 million each in May and July, as international oil prices soared, but it made losses of $16 million last month, $12.5 million in November and $7 million in October as prices dropped fast.

Enemalta recalled the policy paper prepared by the Hedging Policy committee headed by Roderick Chalmers where it was declared that Enemalta's purpose in hedging oil prices was no to make a profit but to maintain price stability as far as possible despite fluctuations in international oil prices.

That purpose, Enemalta said, had been met.