Enemalta announces sharp LPG price increases

Enemalta said this afternoon that it is raising the price of LPG products as from tomorrow, following approval by the Malta Resources Authority.

The new prices, however, do not recover the full cost of the product and the difference is being covered by a monthly government subsidy which is to be €150,000.

It said the subsidy for February and March (the coldest months of the year) added up to €800,000.

The new prices are as follows:

Enemalta said its price review proposal to the regulator was requested in view of the fact that the retail price at which LPG was being sold did not even recoup the direct costs of the product, the corporation said. A 12kg cylinder costs €9 to produce but was retailed at €5.40.

It added that in submitting its proposal to the MRA, it based its workings on the price of LPG forwards, its cost base for its Gas Division and the expected sales of LPG & Propane for 2009.

Enemalta said it estimated that the various LPG gas cylinders would have to increase on average by €0.40 per kilo (including 18% VAT).

"On direction of Government, Enemalta is not passing on the full increase to consumers but the retail price is being increased by €0.167 per kilo (including 18% VAT) instead of €0.40. The remaining shortfall will continue to be subsidised directly by Government."

The following table reflects the current selling price, the price approved by the regulator and the price being announced following Government’s decision to subsidise the difference:

Enemalta said the current price of LPG cylinders has remained practically remained unchanged since 1997. Prices were increased marginally in 2004 to reflect the increase in VAT from 15% to 18%.

Fuel prices will also go up tomorrow. See:

http://www.timesofmalta.com/articles/view/20090331/local/higher-fuel-prices-as-from-tomorrow