The government has declined to explain the reason behind the cashflow problems faced by its fuel procurement and distribution company, Enemed.

When contacted, the Energy Ministry refused to give details on the financial state of Enemed, set up by the government six months ago.

Last week, Energy Minister Konrad Mizzi told the Malta Council for Economic and Social Development that although it had already bought fuel supplies at lower prices for the coming months, it could not yet pass on the full savings to consumers as this would create cashflow problems for Enemed.

Enemed recently entered into new agreements which will realise savings to the consumer

Instead, Dr Mizzi promised that the government would reduce pump prices further in March and April, in addition to the 4c per litre reduction on fuel prices announced two weeks ago. A spokesman for the Energy Ministry said: “Enemed recently entered into new agreements which will realise savings to the consumer.”

Reductions in fuel prices had been brought forward and any savings by Enemed were passed to the consumer while the relevant information was being passed on to the regulator (Malta Resources Authority), the ministry said.

Enemed was set up last August in preparation for the partial privatisation of Enemalta. While selling a 33 per cent stake of Enemalta to the Chinese government, the government hived off all assets and business of the lucrative petroleum division of Enemalta to Enemed.

Among the assets transferred to Enemed are the fuel storage facilities at Ħas-Saptan and the 31st March fuel installation at Birżebbuġa.

Enemed also acquired all the goodwill relating to the petroleum business formerly owned by Enemalta, including licences and rights and the related working capital.