Enemalta makes net gain from hedging

Enemalta has paid some $36 million over the average oil price through its hedging, even though it made a net gain of $10.7 million when the picture is viewed over the last 15 months.

A table showing the profit and loss which the corporation made month-by-month, over a period of just under a year-and-a-half, shows that its hedging agreements had paid off handsomely right up to September - before the rapid drop in international oil prices started to leave its mark.

The disparity in December alone cost Enemalta just over $16 million.

The corporation said it used the profit to keep the surcharge on electricity lower than it would have been without hedging.

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

Referring to the policy paper prepared by the hedging policy committee, which declared that the corporation's purpose in hedging oil prices was not to make a profit but to maintain price stability as far as possible despite fluctuations in international oil prices, Enemalta said this purpose had been met.

The figures published by Enemalta broadly support an exercise which was carried out by The Times and which suggested that there was a large short fall between the price at which Enemalta was buying its low sulphur oil and the going rate on the international market.

The table supplied by Enemalta shows that the losses leapt from just over $288,000 in September (the first month in which the corporation lost money through the agreement) to over $7 million in October, up to some $9 million in November and a staggering $16 million in December.