Enemalta chairman Alex Tranter insisted yesterday that Malta still offered some of the lowest diesel prices among the 27 EU member states, despite the latest hike.
For the first time since the liberalisation of fuel prices, the price of diesel in Malta last week surpassed that of unleaded petrol, going up by €0.077 (3c3) to €1.020 (43c8), causing ripples among industries whose machinery and equipment relies heavily on the fuel.
Nevertheless, the price of diesel remained cheaper than anywhere in the EU, except for Romania, Cyprus, Bulgaria and Lithuania.
Mr Tranter told The Sunday Times that the recent increase was a direct consequence of a rise in international prices to $1,015/MT (metric ton) in March, from $892/MT in November.
"It should be pointed out that the price of diesel would have been higher than published were it not for the steps Enemalta took last November to stabilise prices," he said.
"The impact of that cost is as true to Maltese consumers and transport operators as it is for any other consumer or transport operator anywhere in the world." Asked if Enemalta had alternative options, the reply was merely, "if you have specific alternatives in mind, tell us so we can tell you if we considered them and, if we discarded them, why we have done so".
However, Vince Farrugia, director general of the Chamber of Small and Medium Sized Enterprises - GRTU, believes alternatives did exist.
"I understand that the international price of diesel is rapidly rising, and that Enemalta cannot cross-subsidise fuels under an EU directive. However, the Government had a tool to mitigate all this - the taxation on diesel is too high and it should have been reduced to compensate for the increase," he said.
Over and above the economic blow, Mr Farrugia said this decision was also sending out the wrong message to entrepreneurs, at a time when the price stability agreement, following the euro's introduction, ended last week.
"After a national effort to contain prices, the GRTU has been encouraging businessmen not to rush to increase prices despite the sacrifices they were making," he said.
"Despite all this, the Government is the first stakeholder who bolted out of this agreement. The Government has broken the deal and set a bad example. The message it relayed is that if the prices abroad shoot up then slap them on the consumer," Mr Farrugia pointed out.
The Malta Chamber of Commerce and Enterprise too expressed its concern, and said the increase in diesel prices would adversely affect the operating costs of business.
Chamber president Tancred Tabone said the international crisis of soaring oil prices meant that now, more than ever, Maltese businesses had to streamline their business operations and look for ways to conserve energy.
"Most of all, the way forward lies in breaking away from old methods, and being open to new methodology, in the way we run our businesses on a daily basis," he added.
Federation of Industry director general Ray Muscat also expressed concern as the increase in fuel prices, especially diesel, would affect the operational costs of its members.
"The impact is greatest on enterprises, which, due to competitive pressures or contractual agreements, cannot reflect these increased costs in the prices of their products or services," he said.