The report issued last week by the Malta Resources Authority confirmed that the calculations on the water and electricity surcharge as drawn up by Enemalta Corporation were correct and that they were not skewed against the consumer.

The authority was requested to conduct this study by the government two months ago amid claims that the corporation was utilising the surcharge issue to cover other operational costs that were not linked to the cost of providing energy.

The report, drawn up by Deloitte and Touche, clearly indicates that the surcharge calculations have been correctly computed on the prevailing situation with regard to the purchase of oil as the international market stands today.

It was also confirmed that the corporation is still absorbing a substantial part of the fuel price increase burden.

This leaves us with two issues which need to be addressed.

The first is that although the surcharge is, in itself, justified because of the way the international price of oil has spiralled over the past months, it must nonetheless be admitted that such increased costs for the consumer – families and businesses – has had a negative impact on family life and the way business is conducted.

The second issue is that the government must seriously consider finding other ways and means for the provision of power and, in this respect, the announcement that an international call for tenders for the installation of wind farms in Malta is expected to be issued shortly is welcome.

Such an initiative would mean that energy could be obtained in a less costly and more environment-friendly way. It must be admitted however that it will take time for such a project to give results and therefore we still need to tackle the surcharge

problem now.

The opposition and the General Workers Union continue to insist that the country as a whole and workers and their families in particular are getting the short stick.

Their argument is that the impact of the surcharge on the country’s economy is having an undesirable effect and it is the people who are getting the worst deal – workers not only have to pay much more for the electricity and water they consume in their household but have also to pay more as industry and retailers try to recover part of the cost of the increased surcharge by demanding more money for products sold and services rendered.

The Malta Labour Party also claims that more people should be considered as social cases and that such a situation is resulting in more families falling below the poverty line.

For its part, the government says that it can do

little in the prevailing situation as it has no control on the international market, adding that the fact that families in difficulty are not paying for the surcharge and the capping exercise that has been established for industry is as far as the government can go.

The mistake the government made was that when the surcharge was announced – at 55 per cent – last October it had said that the mechanism that had been worked out would have seen the surcharge rising gradually by just over one percentage point every month.

But after a small reduction made public in late December the surcharge shot up to 67.5 per cent for March and April and it is still thereabouts for May and June.

It must be said that the price of oil since October has continued to rise and reach record levels, and as things stand now there is little else that Enemalta Corporation could do. The government should have however been less specific in its calculation in October and should have said that the situation would fluctuate depending on the international market.

More importantly, the government should have looked into the possibility of investing into other forms of energy much earlier than in fact it did. The few incentives that were offered in the past did little to change the situation. But it’s better late than never.