Rising prices drive motorists mad

Petrol stations saw fewer customers yesterday morning because motorists had filled their fuel tanks to the brim on Sunday after news broke that petrol was to go up in price by 6c per litre.

The hefty increase in unleaded petrol, the highest jump in two years, was announced by Enemalta on Sunday but only came into effect in the early hours of Monday.

The time lag was enough to send motorists scurrying to fill up at the old price on Sunday, with queues forming at some petrol stations.

With unleaded petrol now re­tailing at €1.51 per litre, a motorist filling his tank with €50 worth of fuel last month would now have to spend €52.

When talking to some motorists who were filling up their cars yesterday, The Times got reactions of incredulity and resignation over the hefty increase.

Driving a small Seat Marbella, Ivan Borg complained that the €10 of petrol he had just poured into his car “barely got the gauge past the first line”.

He said 10 years ago when he bought the car, €11.65 (Lm5) of fuel almost gave him a full tank.

Alan Bezzina had a similar story. He drives a small Yamaha motorbike with a fuel tank that would normally be full with €5 of petrol.

Pointing towards the fuel level, he noted that the €6 he had just paid did not fill the tank. “This is not good news. I use this bike because it is efficient. The price hikes in petrol and gas are too much.”

Another man who uses his car regularly for work did not mince his words. “For people like me, who use their car for work, the increase will hurt.”

Admitting he was unhappy with the situation, he was concerned about price increases in other products as a result of the fuel hikes.

But not all motorists had the same attitude, with Jonathan Galea insisting it was not the government’s fault. “The price exploded but I will still vote for Gonzi. It’s not his fault.”

Another man, an accountant driving a Skoda Favorit, said he was less worried about the price increase and more worried about the possibility of oil running out.

The long-term prospects for oil prices are that they will keep rising- John Cassar White

The 6c rise in petrol will have an impact on family budgets since the vast majority depend on private transport, according to John Cassar White, a business analyst. But there was little that could be done.

“The global demand for fuel is rising despite fears of a recession and the long-term prospects for oil prices are that they will keep rising,” Mr Cassar White said.

Cutting fuel taxes to mitigate the increases was not an option, he added, but a capping system could be introduced.

The government rakes in more money from fuel taxes every time prices go up. By capping the amount of taxes it collects, the government would be able to divert the extra funds generated to an emergency fund that may be used to mitigate the negative effect of fuel price spikes.

“The government can be more creative in the use of taxes but there is a limit to this because it is the market that sets the price of fuel,” Mr Cassar White said.

It is a sentiment shared by the Chamber for Small and Medium Enterprises – GRTU, which argued against the introduction of any subsidies on fuel.

There have to be more schemes that encourage people to shift to low consumption cars- Vince Farrugia

GRTU director general Vince Farrugia said the formula used by the state-owned Enemalta to set fuel prices had been in use for years and unless somebody challenged it in a credible way the country had to accept the energy company’s assessment.

Enemalta is the only importer of petrol and diesel for sale at petrol stations. Fuel prices are adjusted every month and the company blamed the latest increase on geopolitical tensions, including the West’s standoff with Iran over its nuclear programme.

Fears of supply disruptions led to “a rather steep and fast increase” in the price of oil in the first three months.

“We have to understand this is not simply a question of fuel going up by 3c or 6c but this is a long-term problem that will not go away,” Mr Farrugia said.

It was motorists’ attitudes that had to change, he added, urging the government to tap into more EU-funded schemes that could help people shift to cleaner, more efficient and smaller cars.

Mr Farrugia said the ratio of a household’s expense on energy products, which included electricity and fuel, had to go down.

“The energy schemes on offer have focussed on electricity consumption – solar water heating and PV panel schemes – but we believe there have to be more schemes that encourage people to shift to low consumption cars,” he added. Such schemes had to also address the needs of small businesses.

Better use of public transport was another way through which families could cut down on the cost of fuel, he added.

However, Mr Farrugia admitted the fuel increases would have an impact on small enterprises such as transport companies, waste carriers and the construction sector.

The hardest hit businesses were those that had term contracts without a fuel escalation cost clause.

“They would have to absorb the cost themselves and this is why the GRTU constantly urges its members to include an automatic price trigger in contracts to make up for higher fuel costs,” Mr Farrugia said.

Even though a sense of resignation over the price increases could be felt across the board, the General Workers’ Union yesterday said it was concerned about the negative impact on families.

While criticising the government for “not having the decency” to discuss the higher fuel prices with social partners, the union said fuel taxes should be cut. It claimed the tax-take from fuel would increase by 55 per cent as a result of the latest increases.

Acknowledging that the country had no control on the international price of fuel, the GWU said it was preoccupied about the “serious consequences” higher fuel prices would have on the cost of living.

It noted that petrol had already gone up 3c last month and insisted that, although Maltese fuel prices were among the cheapest in Europe, wages and pensions were also among the lowest.

A comparative exercise carried out by The Times shows that the new price of unleaded ranks Malta as the seventh cheapest among eurozone countries.

However, in Cyprus, an island like Malta that is heavily dependent on oil imports, unleaded sold at €1.36 per litre at the end of March.

The new price of diesel at €1.39 per litre – an increase of 3c over last month – places Malta as the fifth cheapest in the eurozone with the same price as Cyprus and Spain.

Year-on-year price comparisons show that unleaded petrol shot up by 13c in April while diesel increased by 8c over April last year.

ksansone@timesofmalta.com