The government’s fuel hedging policy, intended to bring long-term stability, came at a cost as owners of diesel-powered cars last year paid 5c more per litre when
compared to average EU prices.
According to calculations made by the Times of Malta, based on the weekly oil bulletins issued by the European Commission, the average price of diesel at the pumps in Malta in 2016 was €1.17 while the European average stood at €1.12.
A similar exercise for 2015 had indicated that the discrepancy was marginally less, with the cost per litre of diesel in Malta being 4c above the EU average.
Introduced in 2013, soon after the Labour Party was elected to government, the fuel hedging policy meant that State-fuel importer Enemed would no longer revise prices on a regular monthly basis but once or twice a year. Such a model is quite unique because, in all other EU member states, prices fluctuate on a weekly basis in line with the international oil markets.
Pump price fluctuates weekly in all other EU states
To date, the only year when diesel vehicle owners profited from this policy was in 2014, when the local price was 4c below the EU mean.
In the case of petrol, local prices at the pumps in 2016 were in line with the European average of €1.29 per litre. Yet, when compared with the previous two years, there is a clear trend of diminishing profits for consumers. While, in 2014, petrol in Malta was 10c cheaper than the EU mean, this fell to 4c in 2015, until the difference was completely wiped out over the last year.
Following the latest revision of prices, whereby Enemed increased both petrol and diesel prices by 4c, the government justified the move saying there had been a 32-per cent increase in oil prices in the last quarter of 2016.
It also pointed out that current prices at the pumps were significantly below those in several EU countries. According to the latest data issued by the European Commission on January 9, both petrol and diesel in Malta sells at 7c cheaper when compared to the European average.
However, pumps which are not being supplied by Enemed are still selling diesel 4c cheaper, at least until the stock lasts.
Addressing a political activity in Vittoriosa yesterday, Opposition leader Simon Busuttil said consumers were being ripped off and taken for a ride by the government.