The increase in the international price of oil and the weakening of the Maltese lira against the dollar has inevitably meant that the rising cost of the country’s fuel bill – in part or in full – will have to be passed on to the consumer.

As from 1 January this year, the government introduced a 17 per cent surcharge on water and electricity bills. The price of petrol, diesel and kerosene has gone up at regular intervals as rising international oil prices forced the government to revise the price at which motor fuel is sold from petrol stations.

But these additional ‘charges’ on the Maltese taxpayer have not been sufficient to balance the country’s escalating energy bill and to make good for the losses suffered by Enemalta. The price of crude oil continues to rise on a daily basis and unfortunately harsher fiscal measures will have to be introduced by the government.

The fuel bill for Enemalta Corporation will go up by a staggering Lm36 million next year. When you add the losses incurred this year and those that would be incurred in 2006, the shortfall will be around Lm50 million. Where that money is going to come from is the big issue here.

The government has come up with two solutions and the social partners have until Monday to analyse and choose an option that will still inevitably hit the consumer hard, either directly through fuel and utility increases, or indirectly, in the form of taxes.

The talk of the town now is to what extent the price of fuel will go up and by how much the electricity and water surcharge will increase.

When the cost of utilities such as electricity and fuel is raised, it is only natural that the public react negatively. Nobody likes to spend more on commodities that, after all, are needed for life’s basic needs every day. Yet this is the reality we cannot escape from.

The two options do not differ much. In the first, the government would make good for 30 per cent of the bill while the remaining 70 per cent would be passed on to the consumer. Taking the second option, the consumer will have to pay for 100 per cent of the cost.

Either way, the consumer will suffer. It makes little

difference if the electricity and water surcharge is raised while fuel costs are left as they are, or whether the fuel prices are increased while the surcharge is left at 17 per cent – or if it is a mixture of both – because ultimately the user has to foot the bill. As Investments, Industry and IT Minister Austin Gatt said, “increases are inevitable”.

This will no doubt add more pressure on families across all social strata, but low-income earners will feel the impact even more. What could be worse is the ripple effect these increases will have on the whole economy. The production of goods and services offered will become more expensive for the producer and service-provider. The natural choice for them is to pass on the cost to the consumer.

Another problem is that salaries are not rising in the same manner. The fact that people will have to spend more on utility bills means that they will have less money to spend on other things, and this is certainly not good news for the country’s economy.

The social partners have been given the chance to give their views on what the government is proposing to do before a final decision is taken. The employers and the trade unions will consider the issue from their respective points of view, but it is also important that they consider the national interest. Only then can a compromise be reached.

Yet, as we said earlier, there is really no way out for the government, the social partners and, especially, the

consumer.