At current oil prices, Labour will need to fork out an extra Lm12 million over and above government’s present subsidy, if it is to honour its promise to cut the energy surcharge paid by consumers by half.
The figure corresponds to the MLP’s costing of the surcharge measure at between Lm12 and Lm15 million.

A MaltaToday analysis of the figures presented in parliament on Monday by Investments Minister Austin Gatt in reply to a parliamentary question by Nationalist backbencher Jason Azzopardi, has revealed that at current oil prices, the surcharge will cost the country Lm62 million.
But the government is already not passing the full impact of the surcharge to the consumer, who is paying a surcharge of 50% instead of a full surcharge of 132%.
To decrease the portion of the surcharge paid by consumers by half, Labour would have to fork out Lm50.3 million in subsidies.
But the Nationalist government would also have to pay Lm38.5 million to keep the surcharge paid by consumers at a stable rate of 50% over the next months.
While Labour is committed to halve the surcharge, the government has kept its options open, keeping the surcharge stable at 50% in the pre-electoral months without committing itself to continue doing so after the election.
But by keeping the surcharge stable despite the recent oil price hike, the government is incurring an extra cost to subsidise consumers. Although the actual surcharge has shot up by 78% in the past four months from just 54% in August to 132% in November, the surcharge paid by the consumer has remained stable at 50%.
Austin Gatt claims the government was able to absorb the impact of the current spike in oil prices without having to increase the surcharge because of a hedging agreement.
Replying to another parliamentary question tabled by Opposition whip Joe Mizzi, Gatt revealed that the hedging of oil purchases enabled Enemalta to buy it’s oil at USD80-USD84 per barrel when the international price of a barrel of crude is close to USD100.

jdebono@mediatoday.com.mt