As from 1 July, the price of fuel products in Malta increased by an average of six per cent on every litre bought.

This was by and large a result of the increase in the price of oil on the international market. The record prices that have been reached had to have an impact on Malta just as much as they had anywhere else, and it was anticipated that there would have been yet another increase in the price of fuel.

The government has been criticised for the measure taken. It has been said that if the hedging agreement Malta had in the past had not been removed, then Malta would not have been hit by the price fluctuations on the international market and therefore there would not have been the necessity to increase the price of fuel products locally.

The hedging agreement had this advantage but, at the same time, it had its own disadvantage too because, just as much as Malta could have bought oil at a cheaper rate when its international price was higher, it could have also bought oil at a higher rate when the international price was lower.

Having said this, however, it is rather preoccupying that the average crude oil price has risen by over 100 per cent since September 2001, that is the month when the world became a different place to live in following the terrorist attacks on the United States.

What has become worse for Malta is a reversal of the trend in currency exchange terms. “The US dollar has been gaining strength in the last few weeks, aggravating the prices of imported fuel in Maltese lira terms,” the Industry, Investments and IT Ministry had said when it announced the recent increase in the price of fuel.

Inevitably, the increase in the price of petrol and diesel has meant that a Lm10 refilling at the gas station will give drivers fewer litres. People therefore will be spending more for travelling purposes although, it must be said that this increase has not and will not change their travelling habits.

What is also of concern is that there is now a greater chance that the 17 per cent surcharge on water and electricity, introduced as from this year, will not only not be removed but could even go higher.

Enemalta Corporation’s losses will accumulate further because of what has happened in the international oil market. The government covers 52 per cent of the gap between international fuel prices in the present and prices in 1999, but this gap in the prices continues to rise.

It would therefore not be a surprise if electricity and water will also be costlier in the months to come. The government has as yet not committed itself on the matter, but if the situation persists, it would have no other option.

“Any movement in the surcharge will be announced if and when the Cabinet decides to make such a move,” was the answer given to this newspaper late last month when the ministry was asked about the matter. It is neither a “yes” nor a “no”, but it clearly indicates that the matter is being considered.

As the price of oil and its products continue to rise, it would be pertinent to call on the authorities to consider the possibility of introducing other sources of energy or promoting them more than they are doing. Some of the alternatives are less expensive and, what’s more, less harmful to the environment.

Malta has unfortunately seen very little of alternative sources of energy other than oil. Now would be a good time to delve deeper as to what one can do to shift from using oil to other less costly and more environment-friendly methods of producing energy.