During the last budget the Finance Minister suggested that fuel may start to be charged at market prices. Fuel prices are fixed, irrespective of their market fluctuation. In this respect, Maltese motorists have stable fuel prices from month to month, contrary to what happens in other countries. The increase in fuel prices, experienced in recent years, have all been due to increased government duty and VAT. This state of affairs is sustained by government subventions to the state owned company.

Diesel in Malta costs 20 cents per litre and is the cheapest diesel rate in Europe. However, Enemalta, the state owned fuel supplier is currently losing on diesel because it is not being priced at market value.

Liberalising the fuel sector may make the operation cost worthy for Enemalta, however the main worry is that government duty would distort the impact of liberalisation.

Contacted by MaltaToday, GRTU President Carlo Cini said that he was not against liberalising the fuel sector, as long as government does not introduce a minimum benchmark.

"If government says that the price of petrol or diesel cannot fall below a certain amount irrespective of market fluctuations, than the GRTU will certainly be against liberalisation", Mr Cini explained.

In the GRTU’s document, ‘Proposals towards a Better Business Environment in Malta’, the union goes one step further in suggesting that short periods of price upswings due to international market forces, should be counter-balanced by a reduction of fuel taxes.

The GRTU argues that the combined impact of fuel taxes, motor vehicle registration taxes and road taxes put Malta on the top rung of high fuel and road taxes. The impact of these high taxes causes high unnecessary costs to many businesses.

If fuel is charged at international market prices and Enemalta retains its monopoly motorists’ could feel a large pinch in their pockets. The company would retain any profit it deems fit, government would continue to reap its taxes while motorists would end up footing the whole bill with no alternative to turn to.

According to information obtained from the International Automobile Association (IAA) Malta has the cheapest diesel rate in Europe and with unleaded petrol at 37 cents per litre it compares favourably with the average EU rate.

The list of average fuel prices for the month of April reveals that UK motorists pay the heftiest prices with both diesel and petrol standing at 50 cents per litre.

Unleaded petrol cars are cheaper to drive in Malta then France, Germany and Italy while Greek motorists have the cheapest petrol rate at 31 cents per litre.

At present the rates for petrol and unleaded petrol in Malta are the same. In most EU countries petrol is no longer available and if Malta will pursue membership, petrol engines will have to be phased out gradually.

Figures released at the beginning of May by the National Statistics Office show that the number of licensed motor vehicles in Malta stood at 248,270. More than 73 per cent of these are private vehicles. The number of commercial vehicles stands at 43,257. Motor cycles registered a constant increase in the first quarter of 2001 and now add up to 12,269.