Unleaded petrol has shot up by 2c3 per litre from 36.3 cents to 38.6 cents per litre, a 6.3 per cent rise.

A similar rise of 2c3 per litre was announced for LRP, or lead replacement petrol, which increased from 39c3 to 41c6 per litre, a 5.8 per cent rise.

The biggest price increase is on EN590 diesel, which rose from 29c to 31c5 per litre, a 2c5 or 8.6 per cent increase.

The price of kerosene has also risen, from 13c4 to 15c1 per litre, a 1c7 increase, or 12.6 per cent.

The prices came into effect yesterday, the corporation said.

The price adjustment has been calculated according to the formula through which the prices of petroleum products are made to reflect the fluctuations in prices on the international oil market, it added.

The revised price of diesel, apart from the fluctuation revision, also includes the periodic adjuster between unleaded petrol and diesel.

In a separate statement, the Department of Information said that the international price of oil had increased substantially over the past year. Between July 2003 and this month, a ton of unleaded petrol rose by $118.25, a 42 per cent rise. Diesel increased by 22 per cent ($58.32 per ton) and kerosene rose by 36 per cent ($92.32).

The price of oil kept the upward trend it has taken since September 2001.

The international price of unleaded petrol is more than double what it was in that month – $400.14 as against $199.04 in September 2001. In the same period, the international price of diesel rose by 52 per cent and that of kerosene by 77 per cent.

As from September 2001, the rates of oil products sold in Malta were worked out according to international prices, the Department of Information said. The weakness of the US dollar between 2001 and 2003 led to a situation whereby the oil products sold locally were not as badly affected as they were elsewhere.

In fact, the price of unleaded petrol in Malta increased by 59 per cent, as against the 101 per cent international increase. The price of diesel shot up by 20 per cent and that of kerosene by 40 per cent.

In the last three months, the DOI added, the price of unleaded fuel rose by 17.6 per cent. At the same time, the dollar was three per cent stronger than it was before. This led to an unfavourable rate of exchange that meant a 20.1 per cent increase in three months for unleaded fuel.

This was curbed by the fact that, in the last three months, the extra charge on unleaded petrol that helped subsidise the price of diesel continued to be reduced. This subsidy would have been removed by the end of the year.

The DOI said the price of oil products carried “other elements” that enabled the rise to be more contained when compared to the international market.

In the past three months, the international price of diesel increased by 14.2 per cent. The unfavourable rate of exchange meant that in fact this increase was of 16.8 per cent. In the same period, the international price of kerosene rose by 14.4 per cent, 17 per cent if one considered the rate of exchange.

The DOI added that considering the fact that Enemalta uses oil to generate electricity, these increases will leave a negative impact on the corporation’s production costs.

This will amount to Lm3 million this year, a cost that will be absorbed by the corporation.

The government is conscious that any changes in the price of oil products is taken as an opportunity for political gain and as an excuse from sectors of the business community to request more protection, state control and market manipulation. The DOI said the government anticipates such pressure.

The DOI said the price increase in oil products had hit the whole world.

In Malta, we have transparent mechanisms, agreed upon by all concerned, as to the impact such an exercise could have on inflation.

If it results that there has been a negative effect, then there are adjustments that need to be made.The DOI added that it was the government’s wish that peace existed in the world. But world terrorism and war in a region where oil is produced are outside the government’s control.

The argument in favour of compensation because of inflation and in favour of protection from competitiveness was contradictory.

The best choice is a stable economy that can react in time to the economic changes that take place in the world, the DOI said.