Let’s have transparency in price of oil

After Lawrence Gonzi had stated that the reason for the astronomical increase in water and electricity tariffs was “an incentive for people to put up solar panels on their rooftops”, Finance Minister Tonio Fenech has again reverted to the previous argument that the hefty rise in water and electricity tariffs is due to the high price of oil.

Mr Fenech said that the present price is tied to the $81 oil price – forgetting that Minister Austin Gatt, when Enemalta was under his stewardship, had publicly stated that if the price of oil went down “to below $85, we will decrease the W&E tariffs”.

The point I want to make is this: we keep hearing the daily price of oil in dollars. But, as we all know, the rate of exchange of the dollar against the euro fluctuates daily too. Once our currency today is the euro, in order to understand better whether the price of oil has actually gone up or not, or by how much, in our currency, the exchange rate of the euro against the dollar at the time of the contract should be given.

Let me give an example. Let us say that Enemalta purchased its present consignment of oil at $81 (mentioned by Mr Fenech), and the rate of exchange at the time of purchase was €1=$1.27, then the actual price in our currency, the euro, would have been €63.7. Let us say that the next consignment is bought at $95, but the rate of exchange will be €1=$1.50. That would mean that the actual price in our currency would be just €63.3 – cheaper than when the price was $81.

So please, stop playing the game of using the rise in the price of oil in dollars to justify the highest water and electricity tariffs in the European Union, as well as the very high prices of fuels. Transparency is urgently required in this sector. One way to have transparency is to start seeing the price of oil also in our currency in the daily news bulletins. But especially when Dr Gonzi or the minister responsible for Enemalta mention the purchase price of oil consignments.