The year has not been brilliant for the commercial and industrial sectors. It is ending on the worst possible note. After weeks waiting for definite news of how much water and electricity tariffs were going to increase, the government announced hikes that have taken these sectors' breath away, not to mention the dismay created among domestic consumers unsure how far the subsidy to be given in their case will really cushion them.

According to the Budget speech, 97 per cent of domestic consumers will not be worse off once the subsidy is taken into account. The announcement of the set tariffs, applicable from January 1, gave no such notional reassurance to the business sector.

Rather the contrary. For some reason best known to Enemalta and the government the sector is going to be hit proportionately much higher than domestic consumers. The outlay on water and electricity will rise for them by up to 52 per cent at the highest level. Lower down, though not very high up, the increase will range from a third to 45 per cent.

Why the jump will be so dramatic seems to be a well-kept secret. One unofficial suggestion is that the industrial and commercial sectors were in some way preferred when tariffs were reduced in October. Even if that was the case, to the tune of a few percentage points, the extent to which the sectors will now be burdened with higher bills seems to outstrip the advantage apparently enjoyed for a few months by a large multiple.

The least one should expect is for Enemalta to explain why that should be so. Given the corporation's stubborn silence, it becomes the regulator's responsibility to speak out. But the regulator, regularly pilloried by the business community, is not forthcoming, either. It demonstrated its weakness again when it was the government which came out with the announcement of the new tariffs, rather than the regulator announcing that it had done its work, and stating the result.

According to the government the regulator lopped off almost €8 million from the cost of the increases proposed by Enemalta. Yet no one is in a position to check where and how that took place. Nor has the regulator come with definite figures of how much Enemalta's costs are expected to go up because of the international price of its fuel inputs. Several different figures have been mentioned by the government, in addition to a substantial figure said to be in the new tariffs to recover shortfalls experienced by Enemalta during 2009.

Similarly no scenarios have been published to show the basis on which the new tariffs were set. From rather cryptic utterances it would appear that the corporation has bought forward the bulk of its requirements for 2010. It did so in the context of critical suggestions, by the opposition as well as by economic operators, to introduce some stability into the system.

If that is what has happened I continue to believe that it was the wrong approach. I also continue to argue that water and electricity tariffs must be linked to the market price of fuel inputs derived from crude oil. It is the consumer who should pay for an input which is subject to market forces. Provided, that is, that purchases of supply are done efficiently, and that the monopolistic position of Enemalta does not mangle true international market forces.

For market forces to be reflected properly one has to move with the market in an appropriate manner. Tying up supplies for one year ahead is much less than appropriate. It is true that Enemalta is hampered by the relatively small size of its requirements relative to the market. Nevertheless that constraint does not necessarily account for the apparent inability to secure supplies at the best guesstimates prevailing in the market at any point in time.

Nobody can seriously expect Enemalta to get it right all the time. Nor can one feel satisfied that we seem to move counter to the market for too much of the time. The government has not responded to a query in this column as to whether the report prepared by the Chalmers team is continuing to be implemented.

For how long was it implemented? In what manner? Was its implementation stopped? If so, when and why?

The position now is that economic operators are faced with massively increased costs which do not seem to be fully justified by the international market. Granted that users have to be more aggressive in identifying how they can economise on water and electricity consumption.

Granted too that a fund has been announced by the government to help users who find themselves in dire straits.

Yet the way forward has to be different. More transparency is required to convince consumers that they are not paying unnecessarily above the odds. Meanwhile, prices will adjust to reflect the new tariffs. More inflation lies in the pipeline.