In a statement issued through the Department of Information, the ministry referred to “uninformed commentaries” that have been made since the budget speech, attempting to cast doubt on the government’s grounds for the introduction of a fuel surcharge.

The government published a report by PricewaterhouseCoopers of 15 November on the effect of fuel input costs on the results of Enemalta’s Electricity Division.

The ministry also referred to two specific allegations, which surfaced over the weekend on this matter.

The first allegation was made by the Deputy Leader of the Opposition, Charles Mangion, who tried to throw doubt on the increased price of fuel for Enemalta by quoting NSO total figures for fuel importation which show that total imports of fuel increased by Lm2.2 million between January and September 2004.

Dr Mangion failed, however, to point out that NSO data refers to both Enemalta fuel and fuel for bunkering. The ministry asked Dr Mangion to personally verify with NSO the fact that while importation of bunkering fuel has decreased by Lm6.3 million the cost of imports by Enemalta have increased by Lm8.5 million. It should be pointed out that this cost only reflects nine months of the year and includes at least five months when the price of oil was relatively stable.

The second allegation was published by MaltaToday which sought to argue that it is not true that the cost of fuel for Enemalta has increased. The ministry pointed out that the conclusion that Enemalta will next year need to recover an additional Lm16.1 million was not reached by this ministry or by Enemalta but by PricewaterhouseCoopers and based on future prices as of this month.

The PWC study was explained at length by PWC representatives at the Malta Council for Economic and Social Development. It was later repeated – in a shortened form – at a press conference held by this ministry on Friday 26 November. MaltaToday was not present at the press conference even though it was invited, the ministry said.

Just in case MaltaToday also doubts the competence of PWC, the ministry published the average monthly prices PLATTS Mediterranean (the reference price used by Enemalta for its purchases) for 2003 and 2004 of gas oil, light sulphur fuel oil and high sulphur fuel oil.

In order to make the right comparisons, one should note that gas oil is mostly used in Summer and accounts for some 10 per cent of consumption while high sulphur fuel oil was phased out completely – for environmental reasons – in February 2004. The tables show clearly that:

Gas oil and low sulphur fuel oil (the only two fuels now used by Enemalta) have registered a higher price each month since March 2004 compared to the same month last year, except for two blips for LSFO in July and August;

November 2004 prices compared to January 2004, show that gas oil is now 57 per cent higher than it was in January while light sulphur fuel oil is 15 per cent higher;

Last year’s average price for high sulphur fuel oil (which was the main fuel utilised) was $139. This year’s average price for light sulphur fuel oil (to which Malta has switched to achieve EU Clean Air norms) is $168 – on a monthly basis the variance is some 30 per cent higher. Malta could, of course, have continued to burn high sulphur (and the increase would have been less) but it is then almost certain that the government would be criticised on health and environmental considerations, the ministry said.

In simple words – the price Enemalta pays for fuel is more expensive this year than it was last year or any other year for that matter.

In support of its allegation, MaltaToday published data derived from the Rotterdam Quotations-Barges FOB, which is absolutely of no relevance to Malta because, according to the ministry:

Enemalta does not buy at Rotterdam prices but at PLATTS Mediterranean which are the prices available in this region;

The prices shown by MaltaToday are daily spot prices and not monthly averages which is the system used by a consumer the size of Enemalta;

The source figures are average prices on a particular day of all European countries while what concerns us is the specific position of Enemalta – averaging out averages is a sure way to get confused results, the ministry said;

Simple logic dictates that if crude goes up (be it Brent, Texas, Russian, Iran, Libya, OPEC or whatever the source and there are different prices for each) so will the refined product – MaltaToday seemed to want to square a circle by stating that while crude has gone up the refined product has remained stable. If MaltaToday was right then the UK, Ireland, Italy and all other European countries who have invariably increased utility pricing, are taking their consumers for a ride as well – unless, of course, it is only Malta which is special, the ministry said.

Incidentally, on Monday the third utilities price hike in the UK this year was announced. It would be interesting to know whether in the opinion of MaltaToday the British are being taken for a ride, the ministry said.