The hedging deal entered into between Enemalta and the Azerbaijani State oil company Socar had a value of €67 million, an official from the National Audit Office revealed in Parliament yesterday.
Following the official presentation of the NAO report to the Public Accounts Committee, its chairman Jason Azzopardi asked for clarification on the value of fuel hedged with Socar following the recommendation of Minster Konrad Mizzi.
The NAO official said it had been established that Enemalta hedged all its fuel purchases for the last six months of the year with Socar.
“Enemalta hedged on the supply of 40,000 metric tons of unleaded fuel and 33,000 metric tons of diesel. These had a notional value of €67 million and Enemalta registered €7 million in losses on the hedge during the period of the deal,” he said.
According to Dr Mizzi, Enemalta made some 80 hedges during last year and only two with Socar following his recommendation. The NAO official said the deal resulted in Enemalta hedging half of its yearly fuel from the Azerbaijani state company.
Dr Mizzi later issued a statement explaining that what the Auditor General had referred to was the nominal value of two hedges. The €67 million did not actually go to Socar. In this instance, the oil procurement was made from BB Energy for unleaded petrol and Kolmar for diesel after a competitive process.
Dr Mizzi insisted the government had only given Enemalta directions to seek a lower hedge, saving consumers €3 million on fuel costs.
The committee yesterday also continued to probe the fuel procurement scandal and the presidential pardon granted to oil trader George Farrugia before the last general election.
Attorney General Peter Grech was called to testify but Justice Minister Owen Bonnici said the government did not want to exempt the AG from professional secrecy. This was a point of principle, as the AG should not be put in a position where he would have to speak about his relationship with his client. PN deputy leader Beppe Fenech Adami said the Opposition recognised the government’s right to do this but Dr Grech’s evidence was in the public interest once he had been involved in the decision and the drafting of the presidential pardon.
If the government was seeking the truth it should have no problem to allow his evidence.
No agreement was reached.
Mr Farrugia’s wife Catherine yesterday started giving evidence, saying she had never worked directly for former prime minister Lawrence Gonzi when the two used to work for the Mizzi organisation.
She worked in the same building with another 150 employees.