Compensation decision on fuel prices in March

A request by unions for the government to compensate families for the hefty fuel increases has been shelved until the end of March pending a report on inflation.

Unions, employers and the government agreed yesterday to wait for a detailed analysis of inflation and the impact of the price increases on the various sectors before discussing whether compensation was warranted and who should benefit.

The decision was made during a meeting of the Malta Council for Economic and Social Development, which was requested by the General Workers’ Union and the Union Ħaddiema Magħqudin after fuel prices went up across the board.

However, addressing a press conference at the end of the three-hour long meeting, Finance Minister Tonio Fenech said financial compensation was not a “foregone conclusion”.

He said in the Budget the government had committed itself to draw up an inflation analysis report, which it would conclude by the end of March. Any decision on compensation or corrective measures would be based on the report’s conclusions.

Warning that the global economic recovery was still very flimsy, Mr Fenech said decisions had to be taken within the constraints of the government’s deficit target and maintaining the country’s competitiveness.

There was consensus, he added, that if compensation was necessary this would be given to the weakest sectors of society.

“I have to point out though the one-off energy allowance last year was awarded because of the hefty increase in water and electricity rates. This year, the price of utilities remained the same,” Mr Fenech said.

The Labour Party lambasted the decision and accused the government of “playing for time and with families’ standard of living” while money had been found to give ministers a double wage.

The party said the government was hiding behind international price increases, ignoring the fact it had raised Excise duty on fuels in October.

Quoting from a presentation by Enemalta, the minister said fuel prices in Malta were still among the cheapest in Europe despite the recent increases. The increase in fuel prices between this year and last was also lower in Malta than in other EU countries.

During the meeting, described as cordial by the social partners, it was agreed to start discussing a revision of the cost of living adjustment mechanism.

The two major unions – the GWU and the UĦM – had suggested a revision of the base wage on which the COLA was worked and changing the weightings given to energy products in the retail price index on which the mechanism was based.

When asked about the €600 weekly increase given to ministers, Mr Fenech confirmed the issue had been raised in the MCESD. He defended the decision taken three years ago to also pay ministers their MP’s honorarium because they could not retain their private practice or job.

Asked about next week’s protest called by the Labour Party, Mr Fenech said he would have attended the march had it been held outside the offices of Opec, the international organisation of major oil producing countries. It has a major influence in the way the international price of oil is determined.

“It is unfair to protest against the government when the increases are coming from abroad. It is irresponsible and I expect them to come up with solutions on who should pay for what they are asking,” he said, adding he understood the people’s concerns.

ksansone@timesofmalta.com