The Malta Resources Authority said yesterday that the calculation on the water and electricity surcharge is correct and is not skewed against the consumer.

The MRA confirmed this in a report on the fuel surcharge mechanism currently used by Enemalta as a basis for adjusting the electricity surcharge.

In a statement, the MRA said that on 7 March, the government requested the authority to conduct an audit and verification process to confirm or otherwise “that the fuel surcharge levied by Enemalta is limited to cover shifts in the cost of managing the fuel stocks required for the generation of electricity and does in no way cover Enemalta’s operational costs beyond these fuel stocks and specifically does not cover, subsidise or is in any way affected by any inefficiencies that may exist within the corporation’s operations”.

The corporation engaged Deloitte and Touche to assist in this assignment and the final report by Deloitte and Touche was approved by the authority. Yesterday it was presented to the Malta Council for Economic and Social Development by the MRA and Deloitte and Touche.

The main conclusions of the report are:

The surcharge calculations have been correctly computed on the basis of the shift in fuel procurement costs and do not include the impact of variances in operational costs beyond those relating to the cost of actual fuel purchases.

Increases in fuel costs are being absorbed by all consumers except those who are classified as social cases and those who are entitled to some form of capping or exemption.

The corporation has and is still effectively absorbing a substantial part of the fuel price increase burden, including:

Lm8.411 million attributable to 52 per cent of the increases up to 2004/5, Lm7.874 million under recovery in 2004/5 as a result of the delayed introduction of the surcharge and above expectation increases in the cost of fuel, and Lm21.991 million attributable to the phasing in of increments in 2005/6.