Last week the government announced a revision in the electricity and water surcharge.

In November the surcharge was raised from the 17 per cent established a year earlier to 55 per cent, and at the time it had was said that the supplement would climb regularly every two months to reach 84 per cent in two years’ time.

The government said it was making such a move because of the ever-increasing price of oil on the international market, and such a decision would enable Enemalta Corporation to survive.

But it was also said that the surcharge would fluctuate according to the international price of oil – meaning that it could have gone higher than the rates established in October, or perhaps lower if the oil products bought by Enemalta were cheaper.

And this is what, in fact, has happened. For two months, November and December, the surcharge was at 55 per cent. The market has since changed and, for January and February, the surcharge has been reduced by 7.5 per cent to 47.5 per cent.

At the same time, the government has also announced a reduction in the price of petrol, diesel and kerosene.

The price of these fuels has been going up or down on a regular basis in recent months, depending on the price paid by Enemalta for the products it purchases from abroad.

From now onwards we expect similar, regular fluctuations in the water and electricity surcharge. It is something that we must get used to.

Gone are the days when fuel prices were established in the budget and remained in force for a full year, irrespective of the changes in the international market, which often resulted in big losses for the corporation because, inevitably, the cost for Enemalta increased as the price on the international market rose.

As the system is now, consumers will be paying “the real cost” for the product – no more, no less. The government has bound itself to revise the price of the surcharge every two months and that of fuel products every month.

While it is believed to be a fair system, there are other considerations that need to be taken into account in this regard.

The most important one reflects the other costs that consumers have to face.

There is no doubt that the increase in the surcharge as established last October brought with it a rise in production costs and also for services rendered. In the last two months, entrepreneurs and businessmen will have begun passing the extra surcharge onto their customers. It is no surprise that the costs of products and services increased in November and December merely because firms wanted to retrieve their extra expenses.

Now that the surcharge has been reduced, will the 7.5 per cent fall be reflected in the prices charged? Will there be a reduction in the cost of products and services in January and February?

And will there be a fluctuation in these prices when they go up or down every two months, as the

surcharge is adjusted according to the international market?

Well, we have our doubts about this, as it is highly unlikely that companies and individual businessmen will go through the hassle of working out their costings every two months in the same way that Enemalta is doing.

We cannot imagine that the price of products or services, having been calculated on a 55 per cent surcharge for November and December, will be brought down to reflect the fall to 47.5 per cent in January and February, and changed again, up or down, when the surcharge is revised in March.

This is, of course, rather unfair on the consumer who, as always, gets the short stick.