For some time, Joseph Muscat has been giving the need to ensure price stability as the reason for holding back from further reducing utility rates and fuel prices at the pump in the wake of the sharp fall in the price of oil on the international market.

Up to only a few days ago, however, Finance Minister Edward Scicluna was putting it differently. At a pre-Budget consultation meeting, he said, when referring to calls for a further reduction in rates, that his government had a vision. Tariffs would go down. But he gave no indication as to when this vision is likely to become a reality.

Suddenly, he has now switched to what appears to be the strongest reason for not passing on to the consumer the benefit of falling oil prices, the buying of oil through the interconnector, and greater efficiency in the generation of electricity.

This is that the savings made are being used to pay back past loans made by Enemalta to build the old power station.

The government had at first planned to reduce the energy ratesfor industry through savings madein energy costs from a gas-firedpower station. However, the commissioning of the plant, originallyscheduled to take place last March, has been delayed.

At least part of the cut in energy rates is being financed out of the monthly instalment of €2.5 million being paid by Electrogas. But how much does it cover exactly?

Judging by what the finance minister has now said about the payment of past loans, it would seem it is going to take a long time before the benefits are passed on to the consumer, unless he has a change of heart just before the next general election, which is very likely.

This is how the minister put it when he last touched on the subject: “Enemalta’s tariffs now have to pay not only for the present but also for the past. This is why the benefits of the interconnector, improvements in efficiency and the cost of crude oil cannot yet be passed on to the consumer.”

The laying of the interconnector was the Nationalist Party’s idea. Now that the island is linked to the European grid and that the price of oil has gone down, industry and, naturally, the consumer as well, were expecting to benefit from the savings made.

Ensuring price stability in a situation where the price of oil is very volatile is wise, but in circumstances when the price has fallen dramatically, the government has stretched the argument to an unreasonable limit.

Which is why perhaps the finance minister has come out explaining the real reason for not bringing down the rates further.

The GRTU has called on the government to reduce the electricity rates by 30 per cent, and the Chamber of Commerce, Enterprise and Industry would like to see a further reduction applicable to industry across the board.

Consumers can hardly be blamed for expecting reductions in the price of petrol and diesel, holding, quite rightly, that the government’s argument that the prices of fuel is lower than the average in the EU is not exactly sound since the higher prices are generally charged in countries where the living standard is much higher than that in Malta.

Much of the confusion that arises over so many issues is due to the fact that the government is not transparent enough.

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