Finance Minister Tonio Fenech told Parliament yesterday it did not make sense to hedge fuel prices in the current volatile situation, but normally Enemalta Corporation hedged at some 70 per cent on both fuel and the dollar.
He was answering a supplementary question by Opposition Whip Joe Mizzi.
He added that diesel could be bought for a discount because Malta had extensive diesel storage facilities, but petrol had to be bought at premium rates because storage facilities were limited.
Mr Mizzi asked why, in view of this, the government had rented fuel storage facilities out to private companies “for peanuts”.
Mr Fenech said such companies’ storage leases were all short-term, such as fuel for pumping stations and bunkering.
Mr Mizzi asked why the government had made no attempt to lease fuel storage facilities close to Malta, and maintained that even while leasing it would still have been cheaper to buy pumping station petrol in greater bulk to achieve a discount.
The minister said there was a lack of petrol storage facilities around the Mediterranean. It was easy to second-guess the government or Enemalta in the current market situation, but one would hardly have thought of it in a normal marketplace.
Mr Mizzi said the minister was being dishonest, because he knew Mr Mizzi had been bringing up the subject of fuel storage regularly for years. The government could have cooperated with smaller countries to buy pumping station petrol in greater bulk.
When Mr Mizzi mentioned the distribution of aviation fuel, the minister said aviation fuel could not be stored in any tank, and the only suitable tanks for it were being used by Enemalta at the airport. The corporation had not prevented one distributor joining the market in order to work with another distributor.
Safety standards for petrol storage were more stringent than for diesel.
The government had decided to exit the market for distribution of fuel for pumping stations, but felt that the privatisation process was taking too long. He had instructed Enemalta to issue a new call for tenders.