Juan Ameen
Past losses on oil to be factored in
On top of rising oil prices, the new water and electricity tariffs, to be announced soon, will also have to make up for a loss of over €21 million that Enemalta is predicting it will incur on the bills up to next month.
The shortfall has come about because the income from the tariffs set in March did not make up for the subsequent market price of oil, a government spokesman confirmed.
Speaking in Parliament on Wednesday, Infrastructure Minister Austin Gatt said the rise in rates was necessary because, together with the price of oil, Enemalta's costs had also increased. The corporation is forecasting a loss of €21.4 million between April and December 2009.
When the electricity tariffs were revised in March, the price of crude oil was $54.7 a barrel and now it stands at $76. In the same period, the price of fuel oil increased from $314 to $469.75 per metric tonne, that of gas oil from $484 to $631.5 while the dollar fluctuated from $1.35 to $1.47 to the euro, Dr Gatt said.
The price of crude oil is expected to rise further this year and reach almost $82.34 by the end of 2010.
Revised every six months, the utility rates are closely tied to the price of oil, which has been increasing steadily over the past weeks.
The old surcharge system on utility bills was scrapped and new higher rates were introduced last December. They were revised downwards by some 20 per cent in March and are now up for review again.
An inkling that tariffs would rise again was given almost three weeks ago after Prime Minister Lawrence Gonzi pointed out that the price of oil was going up.
However, it was only on Wednesday that the government officially confirmed that they would rise, not only because the price of oil was increasing but also because there were losses that needed to be compensated for. Dr Gatt told Parliament that Enemalta and Water Services Corporation would apply to the regulator to raise the tariffs.
He said Enemalta did not have much leeway to recoup the loss by cutting other expenditure because 62 per cent of its budget went into oil.
Electricity consumption has dropped by eight per cent since the last revision and non-technical losses remained at six per cent.
A total of 28,000 households unable to shoulder the burden of the tariffs were helped through government subsidies, Dr Gatt said.
Although the first set of tariffs was approved by the Malta Resources Authority in December and back-dated to October 1, the new tariffs will not become effective retroactively.
Popular Stories
Update 3: Woman found dead in car,...
Updated: Woman dies in car crash
Carm Mifsud Bonnici resigns after...
Part of Dwejra 'Azure window' collapses
The end of the bar that ‘never closed’
Bundy does not know whether to...
Updated - Jason Micallef demands...
This WAS the night - Kurt makes it...
Petrol price up 6c
In Discussion
Updated - Jason Micallef demands...
Gozo tunnel could take 5-7 years to...
CABS remote controlled aircraft shot...
Carm Mifsud Bonnici resigns after...
Joseph Calleja condemns portrayal of...
Updated: Labour would give...
CABS drone shot down
Second group of migrants arrives
Adrian Vassallo in scathing...
11 Comments
Post comment
Please sign in or create your Account to post comments.
Alfred Fenech
Nov 8th 2011, 13:21
Govt spend spend spend , we pay pay and pay.. Unfortunately we only got 1'16 euros to make good and not 500euros a week.
Alfred Fenech
Nov 8th 2011, 13:11
This remi nds me of the coffee scandal in the 80s. When all purchases for the whole island's
need was the responability of one, one man alone , in the trade department. But he was Mintoff's
blue eyed boy. Within three months, the whole island was lacking in all commodities,
Anyone wanting to do you a favour, would hand you a toothpaste, pasta chocholate etc....
Now we that we have come out of that mess, our pay is very hindered by high rise of the cost of
living. This is causing havoc and hardship to all the people . We close both eyes and say that all is well, we are moving. What a shame...
moving.
David Cassar
Nov 7th 2009, 07:50
What a disgrace. Enemalta management team is inexistent. They would not survive a fortnight in the private sector. It’s not the oil price that is causing havoc but their inability to align their cost structure with their revenues. No, to the contrary, full steam ahead as usual and let the consumer pay for the inefficiencies.
Nigel Lawrence
Nov 6th 2009, 18:03
An obervation would suggest that these prices are to soley compensate for the incompetence of Enemalta insomuch that why is it that the price of generating electricity goes up a lot higher, AND faster, than the price of petrol. Isn't this stuff coming out of the same barrel?
P.Cassar
Nov 6th 2009, 17:50
ALFRED SANT AGAIN BEING PROVED RIGHT BY THE PN THEMSELVES!!!!!!!!!!
Alexander Morana
Nov 6th 2009, 16:51
So Minister Gatt has let the cat out of the bag. Watch out for higher tariffs on water and Electricity come next Monday! My fellow Maltese hold on to your wallets. Mr. Mula I have been suggesting of late that the problem with higher costs of energy in Malta lies not of supply but of distribution. The Government is subsidizing a debt ridden, inefficient and monopolistic, flop like Enemalta, to dictate the price of carrying that service.
A. Zahra
Nov 6th 2009, 15:58
@ Phil Humphries
"".... but wasn't Enemalta supposed to be reducing its other costs ? " The other costs are mostly made up of salaries of its employees. I suppose it is being proposed that Enemalta either sacks a number of its employees or that it reduces their wages, same as the socialist government did to the bank employees.
Phil Humphries
Nov 6th 2009, 11:15
Minister Austin Gatt said the rise in rates was necessary because, together with the price of oil, Enemalta's costs had also increased.
We all know that the price of oil has increased, but wasn't Enemalta supposed to be reducing its other costs ? - Seemingly not.
Also, hasn't the Euro been relatively strong against the Dollar since the last review, or am I missing something here ?
Small wonder that I have been waiting since April for the €466 refund I was told to expect within 3-4 weeks.
A Camilleri
Nov 6th 2009, 11:07
How on earth are the forecasters so accurate that they can say prices will reach $82.34 by the end of the year? It's hard enough to predict the prices to the nearest ten dollars let alone to the nearest cent!
John Mula
Nov 6th 2009, 10:29
Usually companies operating at a loss continually are closed down to allow for more efficient operators into the market. Why is it in the case of Enemalta we have no competition or alternative from were we can buy our energy........
We are in 2009 approaching 2010 and we still have companies that live on subsidies and are operating inefficiently with the knowlegde that if everything goes wrong they cant finish without a job..... some competition eh!!!
Paul Barrett
Nov 6th 2009, 09:32
It would be more just if tariffs were only changed at the time of an ACTUAL reading of meters and not at an arbitrary point which seems to fall in the middle of an estimates period.
To me it seems morally criminal to allow the price to be set on any (none returnable) item that has been sold at one price and then billed at another (normally higher) price.
Why does it take so long to send out the bill following a reading. The operation is electronically based and with modern equipment in use, the bill should be in the post either the same day or at least the same week.