The Prime Minister did not call a press conference to announce the increase in the prices of petrol and diesel, as he did when prices went down by two cents. The Minister of Finance did not announce such increases in his Budget speech.
This government has been boasting about ‘stability’ in the prices of petrol and diesel for the past two years.
Now we have a confirmation that this famous stability was nothing more than artificially higher prices for both petrol and diesel in Malta while the price of oil on the international market hit rock bottom prices during the past two years.
Now, that the international price of oil has gone up slightly, ‘stability’ has disappeared. It is clear that the government is taking advantage of the current situation to collect more money from the consumers it is supposed to protect.
Consumers are being robbed four cents in every litre of petrol and diesel during this month. According to the call for tenders issued by Enemed for the importation of petrol on December 9, 2016, the first consignment is scheduled to arrive between February 1 and 5.
This means that Enemed still has a supply of petrol at the old rate under the previous contract and that the government is robbing consumers of €378,120 during January from the sale of petrol.
Why did the government not increase the price of petrol as from next month? What kind of a free market do we have if the government fixes the prices of petrol and diesel?
In July of last year, Enemed issued its call for tenders for the supply of diesel, which was scheduled to last until mid-February of this year. This means that the price of diesel for this month should have remained the same as last month’s.
The government is therefore robbing consumers €274,000 during this month from the sale of diesel.
In other words, the government is robbing consumers a total €652,120 from the sale of petrol and diesel this month.
One needs to remember that the government has just collected more than €140 million in duties and taxes from the sale of petrol and diesel during 2016, in addition to the abnormal profits made by Enemed at the expense of consumers.
The private companies that import diesel are still selling diesel at €1.14 per litre.
The Malta Automobile Club understands that a businessman seeks to make as much profit as possible, but consumers cannot accept that they be robbed by their own government.
It is remarkable that in 2011, the then leader of the Opposition of the time used to speak one way, and now that he is in power he is doing the opposite.
In January 2011, the price of petrol was exactly the same as it is now, €1.31 per litre. At that time, the leader of the Opposition called for a national protest, when the international price of oil was much higher, almost twice as much.
In his 2011 New Year’s Day address on One TV, the leader of the Opposition of the time said that “the State’s role was central in ensuring effective competition in a liberalised market that can benefit consumers”. He complained that there was “much privatisation, but little liberalisation”.
What happened to that address? Where is the “effective competition” in the market for petrol after almost four years of this government? Why has the privatisation process of Enemalta or Enemed not been completed so that we could have a truly free petrol and diesel market?
On January 9, 2011, the leader of the Opposition of the time had accused the Malta Resources Authority (MRA) that it was not protecting consumers. He said that the MRA should protect consumers, not the government. Where are the regulators under this government? What happened to the nice words uttered when in Opposition?
Is it possible that the Malta Competition and Consumer Affairs Authority (MCCAA) and the Regulator for Energy and Water Services (REWS) have not noted that the government increased the fuel prices a month in advance?
On January 16, 2011, the leader of the Opposition had said on One Radio “that although the Maltese government has no control over the international price of oil, it does have control over taxation on oil”.
So now that he is in power, why did the Prime Minister not decrease the four cents from the 75 cents duties and taxes that the government is collecting from the sale of petrol, and the four cents from the 65 cents duties and taxes that it is collecting from the sale of diesel?
Why is it that when he was the leader of the Opposition he used to say one thing, and now that he is Prime Minister he is doing differently?
On March 2, 2011, the Labour Party blamed the government for the fuel prices hike. It said that “this had only come about because the government ignored advice by the International Monetary Fund for the forward buying of supplies”.
Knowing that the trend was moving towards increased prices, why did this government not follow such advice?
According to the Weekly Oil Bulletin published on January 2 by the European Commission, at the price of 56.1 cents per litre of petrol net of duties and taxes, Malta has the second highest price of petrol after Denmark. This price includes the profit made by Enemed.
Who is checking how Enemed is purchasing petrol and diesel? If two years ago the Falzon Group was in a position to purchase diesel at 2c less than Enemed, what guarantee do we have that Enemed is capable of purchasing petrol and diesel at the lowest prices, assuming that it is not making abnormal profits?
Why does Enemed fail to publish its call for tenders for the supply of petrol and diesel on the European Union site “Tenders Electronic Daily”, as other companies in other EU member states do?
The importation, storage and wholesale of petrol and diesel should not be in government hands, but should be transferred to the local representatives of the foreign oil companies, and allowed to compete among themselves for the benefit of consumers.
Alfred Farrugia is president of the Malta Automobile Club.