What Enemalta pays for oil purchases

A report on commodities I came across recently in the UK financial press revealed some interesting facts.

Over the past five months the price of crude oil has risen spectacularly from a level of $40 to $72 per barrel.

However, this is not expensive in comparison with price levels that were reached last year ($147).

Indeed, a commentator expressed the view that, even if the price reached $85 per barrel (at the time of writing this has gone down to $68) by the end of this year, the average price for this year would still be 33 per cent below the 2008 average.

Admittedly, Enemalta purchases refined and not crude oil at a cost that is higher than that for the latter.

So it can be argued that the reduced cost to our electricity producer this year may not be commensurate with the fall in crude oil prices.

Nonetheless, there is nothing to prevent Enemalta, for the peace of mind of the public as consumers, from declaring publicly the average price of its refined oil purchases last year and the likely average for this year based on its actual plus forward purchases for this year. It is appreciated that, for commercial reasons, Enemalta may be reluctant to reveal publicly the price at which it purchases refined oil from time to time.

However, surely consumers are entitled to be given at least an indication of average annual prices by Enemalta which enjoys a monopoly in electricity generation in Malta.

Dissemination of such information should serve as a useful public relations exercise for Enemalta - and for that read government - in justifying changes from time to time in electricity tariffs (whether up or down).