The price of oil reached new record highs this week, jumping to over $75 a barrel as political and social developments around the world continue to put pressure on the industry.
Yesterday the world remembered the victims on the London bombings one year after terrorist attacks hit England’s capital city, causing death and devastation. It came nearly four years after the
terrorist attack on the United States.
The situation today is still highly volatile, as new international situations combine with older ones to push the world into more danger – and this affects the price of oil on the international market.
The problems in the Middle East continue to escalate, as the Israelis and the Palestinians perpetuate their long battle in a crisis that seems to have no end. At times, the two sides appear closer to each other, but soon enough they grow apart once again as more lives are lost and the difficulties increase.
The international community is also preoccupied with the stand taken by Iran in terms of nuclear enrichment and, more recently, North Korea going ahead with its missile tests has triggered international condemnation and outrage. In the meantime, the situation in Iraq is not a pleasant one, to say the least.
From an economic point of view, the rapid expansion of India and China has added more demand on the oil industry. All of this is creating pressure on the oil industry and as things stand now, it appears unlikely that matters will change.
In a globalised world, every little thing that happens elsewhere affects the rest of the world – and therefore Malta has to face the consequences too.
Malta does not have its own natural resources on which to rely. What is happening around the world – that is leading to continuous increases in the price of oil on the international market – is affecting the way we live here.
Up to a few years ago, the price of oil was below $20 a barrel, but now it costs nearly four times as much. In this scenario, Malta was bound to be negatively hit and, as we all know, since last November all Maltese consumers – and that includes households and businesses – have had to face hefty water and electricity surcharges and an increase in the price of petrol and diesel.
This is in turn reducing people’s purchasing power, as families have to spend more money on the electricity, water and fuel they consume, while their wages have remained more or less the same. And businesses also pass on their extra costs to the consumer.
The surcharge percentage and the fuel costs have changed continuously every month or two, but have remained high and it does not seem likely that they will go down anytime soon. If anything, considering the way the international political situation is evolving, it is to be expected that the price of oil will continue to rise, with the resultant ripple effect on the Maltese way of life.
Where does all this leave us?
Malta has always relied on oil for its power, and over the years has paid little attention to other forms of energy. It is only recently that some steps have started to be taken in this regard, but the process does seem to be rather slow.
The recent announcements by the government regarding alternative sources of energy indicate the new direction the government wants to take. But these things take time to plan and implement, and so Malta still seems a long way from changing, at least in part, to forms of energy other than oil.
Such initiatives should be stepped up and given priority.