Opposition Leader Joseph Muscat told Parliament yesterday that, on the basis of the current price of oil and the oil purchase requirements, the opposition had concluded that Enemalta's funding requirements were now 33 per cent lower than the government's original projections, and was therefore insisting that utility tariffs be reduced to a surcharge equivalent to 50 per cent, charged retroactively.

Speaking on a motion proposed by Opposition Whip Joe Mizzi calling for the revocation of three legal notices relating to energy utility tariffs, Dr Muscat said the government was cut off from reality. This was the first time Parliament was discussing the utility tariffs, because the budget had failed to mention them even if they had been announced weeks before.

According to the KPMG study commissioned by the government, the Prime Minister had assumed that there were 209,000 residences when the number of families amounted to 140,000. The report, Dr Muscat said, had included vacant premises, summer residences, garages and holiday flats. When the opposition had pointed this out, the government had removed vacant dwellings and garages from its calculations. Other mistakes prevailed.

Referring to the electric meter rentals, he said the rent of single-phase meters for households had increased from €28 to €75, a 168 per cent increase. Three-phase meter rents had increased by 705 per cent to €252. Water meter rentals for households had increased by 100 per cent to €56.

Businesses had also had their single-phase meter rent increased by 150 per cent from €60 to €140. Three-phase meter rent had increased by 650 per cent to €420. Water meter rent had increased from €28 to €120, an increase of 330 per cent.

Dr Muscat said that while the government was today collecting €11 million from water and electricity rentals from households, this was to be increased by 150 per cent to €30 million.

From businesses, the government was going to collect €12.3 million from the €3.5million currently collected. This amounted to a 251 per cent hike. The government was depriving families of their spending power.

Dr Muscat said that despite increased fuel costs, before the election the government had pledged to leave the surcharge at 50 per cent at a time when it had said that the economy was performing well. But after the election the surcharge had increased to 95 per cent, with the government declaring that subsidies were an incentive to encourage wastage.

In October the government had introduced the revised utility rates. It had told the MCESD that people would in effect be paying a surcharge amounting to 245 per cent. Dr Muscat claimed that the government had exaggerated this surcharge so that it could backtrack and be seen as accepting the people's will. This, however, seriously damaged the economic and business morale.

Because of pressure by all social partners, the government had decreased the estimated fuel bill by €30 million. It had also announced that it would revise tariffs if the price of fuel oil decreased by more than 15 per cent.

Everyone knew that fuel oil had decreased by 43 per cent in October when compared with the same month the previous year. The government had also estimated that its oil expenditure would decrease by only 17 per cent. This meant that by the end of October, the surcharge should have been brought down from194 per cent to 60 per cent.

In November the Prime Minister had informed the unions that the government would revise the utility tariffs in such a way that Enemalta would be earning €4.2 million less in revenue. He had said that 138,000 families were also to benefit from the eco-contribution scheme.

Dr Muscat said that the Prime Minister had again included in his calculations vacant properties, summer residences and garages. At the same time the government had announced the sewage tax.

Turning to the intervention by the Malta Resources Authority, Dr Muscat said it had commissioned a new firm of auditors to examine the KPMG report. This report did not consider how the amounts in the first report were arrived at. It also assumed the number of meters installed in households, clearly showing that Enemalta did not know how many meters were installed in Malta and Gozo.

The MRA report also showed that Enemalta had based its oil price estimate on crude oil, adjusted by conversion factors. He said there were technical faults in using these conversion factors, with Enemalta estimating its fuel cost at 12 per cent more, amounting to approximately €30 million.

The price of oil had actually gone down by half, but now Minister Austin Gatt wanted to double the surcharge. Dr Muscat said the price of oil had gone down twice: by 22 per cent between October and November and by 29 per cent between November and December.

He called for the regulator to be pro-active and delve into this issue. In other European countries, where there was a state monopoly that issued figures that were obviously meant to burden and tax the people and offload on them the inefficiencies of the monopoly, the regulator got involved without needing to be pushed into action. The Maltese consumer lacked a watchdog. When the Prime Minister had referred the unions to the regulator, the latter had declined to discuss the past, but only wanted to discuss the present and the future. What sort of independence was this? The regulator could indeed look back or resign.

Eventually the 11 unions had met the regulator and reported agreement, but the regulator had immediately denied what the union representatives had said. How could 17 union representatives be wrong? Dr Muscat asked.

When the regulator advised the unions to see how things would go from there on, it was another way of creating uncertainty. It meant that the past had not been well handled according to EU regulators.

Dr Muscat said Labour was now basing its proposals on what could be done and how the market was already moving. The average price from December to February had fallen to US$42 per barrel, down 54 per cent from October 2008. The proposals included all conversion factors between crude and fuel oil being used by Enemalta. If the average price for 2008 was taken at €70, the cost of fuel for 2008 should have been €268 million and €122 million for 2009. The proposals were not taking the corporation's inefficiencies into account.

Enemalta's cost should be around €204 million, or 33 per cent less than the government's original projection of €305 million quoted by Enemalta. Dr Muscat said that, realistically, there had been no reason for the government to increase the surcharge from 50 to 95 per cent, so the surcharge should really be halved from 95 to 50 per cent, charged retroactively.

This held good if the government's calculations were well done, without anyone having committed the country to any unknown agreement. If such an agreement did exist, the tale could have been rammed down the people's throats when the price of oil was high, but not at present levels.

The government must base its reviews on the unions' proposal and give assurance on maximum rates up to end of the year so that families could plan better. The regulator had been given a clear mandate to protect the consumer and nobody else. Surely all agreed on this issue.

Dr Muscat read a letter which union representatives had given to all MPs as they arrived for the sitting. In the letter the 11 unions appealed to each MP to take a position that the water and electricity tariffs should be drastically reduced retroactively, given the hardships inflicted on the people and the slide in the price of oil, which was now very close to pre-surcharge levels.

The letter also said that MPs should question the eco-reduction threshold system which did not treat all Maltese the same.

Concluding, Dr Muscat assured the 11 unions that the opposition would be completely loyal to the people's wishes.