Opposition leader Joseph Muscat said this evening that on the basis of current oil prices and oil purchase requirements, the Opposition had calculated that Enemalta’s funding requirements were now 33 percent lower than the government’s original projection.
The Opposition, therefore was insisting that there was no reason for the utility tariffs not to be reduced to a surcharge equivalent of 50%, charged retroactively.
Dr Muscat was speaking at the opening of a two-day debate on the water and electricity tariffs.
Dr Muscat said the utility tariffs saga showed that the government was isolated from reality and was not understanding the hardship which the people were suffering.
The workings presented to the people by the government simply made no sense. Last October, the Prime Minister and Infrastructure Minister Austin Gatt claimed that the new tariffs would only cost households an additional €1.5 to €5 a week. But that calculation had even included summer homes, holiday flats, garages and empty houses. Then empty dwellings and garages were removed from the equation, but other mistakes remained. Among them were the workings of the eco-reduction which was meant to encourage those who saved energy but had thresholds which were so high, that hardly anyone would benefit.
Among the toughest measures was the steep increase in the fees for meters. For domestic users, the fee for a single phase meter had risen from €28 to €75. The fee for a three-phase meter rose by 705% to €225. The fee for water meters rose 100 percent to €56. As a result, government revenue from meters would rise from €11 million to €30 million.
For business users, the fee for single meters had risen from almost €60 to €140. For three phase meters, there had been a 650% increase to €420. In this case, revenue for the government would rise from €3 million to €12.3 million. These steep increases in costs for business had been imposed at a time of economic slowdown when, elsewhere, governments were easing the burdens on businesses.
The situation, Dr Muscat said, was starkly different from what the people were told before the general election a year ago. The government first raised the power surcharge to 90 percent and then it imposed these exaggerated tariffs which instilled uncertainty in the economy, bringing it to a standstill.
Dr Muscat said the government last October bound itself to revise the tariffs before the half-year deadline if oil prices fluctuated by more than 15 percent from the last revision. But that promise was not kept. And as oil prices fell, the Maltese were receiving bills with the equivalent of a surcharge of 194%.
Even last October, oil prices were already 43 percent lower than in October 2007. Fuel prices were substantially less now.
Dr Muscat described the regulator – the Malta Resources Authority – as being a ‘sleeping beauty’ which only awoke when asked to by the Prime Minister. It appointed an audit firm to check the workings of the tariffs. They confirmed them, but said they could not vouch on the actual figures because Enemalta did not even know how many electricity meters there were. The report found that the tariffs were not based on fuel oil and gas but on crude oil adjusted with conversion factors.
But the fuel cost estimation was off by 12% or €30 million, Dr Muscat said.
“In any other country with so many doubts about the figures and with a government wanting to impose its inefficiencies on the people, the regulator would have acted of its own initiative, and not when asked to do so. Rather than a watchdog, what the people have is a government lap dog,” Dr Muscat said.
He insisted the MRA had a duty to review the current tariffs, and not look to the next revision.
Dr Muscat said that oil prices since October had fallen by 54 percent from around $70 million last year to $42 million now.
On the basis of oil purchase requirements, the Opposition had calculated that Enemalta’s funding requirements were now 33 percent lower than the government’s original projection.
The Opposition, therefore was insisting that there was no reason for the tariffs not to be reduced to a surcharge equivalent of 50%, charged retroactively
Dr Muscat said the opposition was basing its calculations on the assumption of proper oil purchases. He hoped that no one had signed any oil purchase agreements which were unfavourable to Malta.
Dr Muscat said the Opposition was also urging the government to reduce the eco-refund eligibility threshold as proposed by the trade unions.
Finally, the government was urging the government to cap the highest tariff levels possible this year so that households and industry could plan ahead.
Furthermore, the regulator should be given clear mandate to protect consumers and no one else.