Turns out silence is golden
About three months ago, well before the oil scandal broke out in all its misery, I intervened in a radio programme about taxation. I said that taxation is not just income tax and, avoiding the obvious (VAT, licensing, etc), I said the prices of fuel and electricity must surely include a hidden tax because, more often than not, they just don’t make sense.
I claimed that energy is Malta’s best-kept secret. There was deadly silence from the other end, then they thanked me and went on with whatever they had been saying.
If it was a secret, a secret it remained.
Everybody, but everybody, is now talking about the oil scam. Everybody seems a bit bewildered.
There is shock at the realisation that we have been had, as a nation, on a huge scale, for umpteen years without anybody noticing.
There is also disappointment at the lack of a speedy resolution.
Now there is doubt about the correctness or incorrectness of taking commissions. Was it wrong for – let’s call these oil-bunkerers ‘third parties’ – these third parties to demand and receive commissions?
I think it isn’t wrong because a commercial entity must work for gain and if it is charged to use its services for a second party, it either charges the second party or the company they choose to procure whatever it was from. So far so good, but rather than furnishing answers, this raises more questions.
We are talking about an essential – vital, even – commodity: oil, so, prima facie, it is to be expected that they should be rewarded well for procuring it and ensuring that our economy stays alive and that the lives of the common people remain ‘normal’.
Yet, the first question that comes to mind is: did Enemalta pay fees to these oil procurers for their services or did it expect them to thrive on their devices?
If the private procurers were being paid for their services by Enemalta or its appointed board, then the receipt of ‘commissions’ from the suppliers becomes less morally hygienic because they would naturally go for those companies willing to pay such commissions and exclude all others even if their offers were more advantageous to the national interest.
But the question is: why, if Enemalta has enjoyed a monopoly on fuel supplies for so long, should it have relied on private commercial agents to submit tenders in the name of major oil companies?
Enemalta satisfied itself with the creation of a board that scrutinised tenders and would choose one from among the rest and stopped at that.
Mind you, it seems that Enemalta was not actually buying from oil companies; it was buying from their local agents and it is here that things simply fail to make sense.
With the Enemalta monopoly, the local ‘bunkerers’ or agents should only have had an offshore sphere of action. Why did Enemalta not have an ‘in-house’ oil procure-ment agency? Why use private companies to act as intermediaries between the State monopoly and the foreign suppliers?
Therein lies the nub of the whole matter. Surely these private procurers could not claim that their interests were being damaged by any Enemalta direct procurement, or am I wrong? Why should the Government not buy directly from the suppliers? I’m sure we need a lawyer at this point. If Government can’t buy directly, then it either pays the middlemen or it lets them charge a commission.
If it were legitimate for Enemalta to procure supplies without recourse to middlemen or representatives, one is led to believe that Enemalta did not do so because it lacked the expertise, the specialised personnel, to undertake direct dealings with the big oil companies, like Total, BP, etc.
But if Enemalta came to this conclusion and decided to go to the private commercial agents, why did it allow the situation to linger, without seeing to it that within a few years it would have the necessary skills to do without them? Was it complacency? Was it the idea that you don’t dabble with an engine that runs? Who knows.
So who is to blame? For blame there is, indisputably. You can ask the police, the Cabinet, the Attorney General and the President and they would all nod. Nobody is pardoned for having done nothing wrong. But who is to blame?
I cannot blame the intermediaries for flogging their chances to the last cent but I think Enemalta’s practices were far from brilliant, unless there were legal impediments preventing them from buying directly.
A complex, convoluted bureaucratic system seems to have been created over the years that made everybody happy – except poor John Citizen.
Perhaps oil procurement and fuel and electricity rates are not really a secret.
Perhaps everything is so complicated that no one on the panel could give an answer, despite the fact you couldn’t ask anyone higher than the chaps on the panel in Malta.
Perhaps it’s all a matter of what is called ‘Turkish Administration’.
But still, the blame must lie somewhere. Charity dictates that I blame the system but I am still very unhappy.