New power rates 'not backdated'

The new electricity bills, which could rise to last year's levels, will not be retroactive to October 1, The Times has learnt.

Social partners attending a meeting of the Malta Council for Economic and Social Development (MCESD) on Thursday were told that the soon-to-be revised tariffs would not be backdated like last year's rates were.

Revised every six months, the rate of the tariffs is closely tied to the price of oil, which has been increasing steadily over the past weeks. When controversially introduced last year, the new water and electricity rates were announced in December but back-dated to October. That decision was hotly contested by unions and employers who joined forces to protest against the tariffs. In fact, months later, Investment Minister Austin Gatt admitted the government could have introduced the tariffs differently.

In Thursday's meeting, the social partners were informed by Finance Minister Tonio Fenech that the tariffs might go back to the levels of those introduced almost a year ago.

The first hint that the tariffs might rise was dropped almost two weeks ago by Prime Minister Lawrence Gonzi in a political meeting when he reminded that the price of oil was going up.

Before the MCESD meeting, Dr Gatt publicly issued a second warning. In comments he gave after an unrelated seminar, Dr Gatt said Malta would inevitably have to look at its power tariffs again as the price of oil fluctuated.

The social partners warn that any such increases in the rates would hit families and businesses hard at a sensitive time.

People are already stretched to their limit and higher tariffs would damage the country's economic situation, which is already very difficult, according to the Union Ħaddiema Magħqudin.

Union secretary general Gejtu Vella said yesterday an economic solution was needed because the country could not shoulder the burden if the price of oil increased.

His counterpart at the General Workers' Union, Tony Zarb said increases would only bring more workers and pensioners closer to the poverty line. "It would be suicide if the tariffs went up again."

Similarly, the president of the employers association, Pierre Fava, said higher tariffs together with the planned €6.06 cost of living adjustment would lead to a loss of more than 1,000 jobs.

The combination of the two would adversely hit particular sectors such as services, security and tourism. "However, I firmly believe the government is sensitive to the whole issue," he said.

Vince Farrugia, director general of the Chamber for Small and medium Enterprises - GRTU, said people could not avoid using electricity, adding that more care should be taken in the government's purchases of oil. "The high electricity bills are having a dramatic effect on consumers."

Labour economy spokesman Gavin Gulia said "irresponsible" comments (about the potential rise of electricity rates) only created more economic uncertainty, especially since unemployment was increasing and exports were dropping.

Dr Gulia called on the government to take up the opposition's suggestion to declare a cap on the energy tariffs for next year.

The tariffs were revised downwards by almost 20 per cent in April after the price of oil dropped $40 a barrel.

After a revision exercise by Enemalta Corporation, the new tariff structure would have to be approved by the Malta Resources Authority.