Updated | [WATCH] Fenech – cheaper electricity bills being financed by high fuel costs

PN call on government to publish oil procurement contracts. Video: Chris Mangion

The government is financing a recent 25% reduction in electricity and water tariffs by keeping fuel costs at a high rate, shadow finance minister Tonio Fenech said.

Citing an independent study, he said that a single resident who pays €50 per week on petrol must fork out an extra €140 per year on electricity and fuel costs than he had while fuel costs were cheaper and electricity tariffs more expensive.

He cited statistics from Europe’s Energy Portal that show that, excluding taxes, Malta pays €0.71 per litre of petrol, higher than any other EU country and far above the EU average of €0.56. He hit back at the governments dismissal of these statistics as ‘unofficial’, saying that the website gets its information directly from the European Commissions website and that companies like the BBC have cited their statistics before. He added that he disagreed with the government’s policy of hedging fuel.

While Fenech claimed that the estimated market price of petrol should be €1.16 per litre, calculations show that that could only happen if Malta buys its fuel at a rate similar to Sweden, that buys fuel at a cheaper price than any other EU member state.

When asked whether this means that Malta should buy fuel at a rate similar to Sweden’s, Fenech said that it should actually buy fuel at a cheaper rate than Sweden.

“We buy fuel from a state-owned company while Sweden buys it from commercial ones,” Fenech said. “I’d expect state-owned companies to have a larger social conscience.”

Shadow energy minister George Pullicino said that Malta is paying more for fuel than it had in 2009, when oil had cost $70 per barrel. 

“Petrol had cost €1.11 per litre back then while diesel had cost €0.96,” he said, citing Enemalta statistics. “Now we’re paying €1.35 per litre of diesel and €1.44 per litre of petrol. We’re paying 40% more for diesel and 33% more for petrol despite the price of oil having plummeted to $64.4 per barrel.”

“When you pay €30 for diesel you’re paying €12 for nothing. If you pay €30 for petrol you’re paying €9 for nothing. No one can undermine these figures and the governments only tactic is to dismiss them without substantiating their arguments.”

They repeated their call for the government to publish its contracts of sale for oil. 

“That way the people will know whether the government is buying oil at too high a price or whether it is generating a hidden profit at their expense,” Pullicino said.

PN election candidate Ryan Mercieca said that this ‘secret tax’ on fuel is one of many extra costs that the government has placed on driving- along with higher vehicle license fees, higher vehicle insurance fees, and a new tax on tyres.

“The Prime Minister is double-faced because he had protested in the streets about fuel prices that were much lower than they are now,” he said.  

Government says Fenech using 'invented' fuel estimates 

As a reaction, the government said that Fenech's argument that high fuel prices are being used to finance the reduction in electricity tariffs shows how incompetent the Opposition is in carrying out economic and financial analyses.

“Fenech’s estimates that the price of petrol in Malta should be €1.16 per litre while that of diesel should be €1.09 have been invented,” the government said in a statement. “The EU average price of petrol is €1.42 per litre whie that of diesel is €1.29.”

The government lashed out at the previous Nationalist administration and asked Fenech to explain why the price of petrol and diesel had increased by over 35% while he was Finance Minister under the previous administration.

“The average family ended up having to pay over €1,200 on fuel [between 2009 and 2013],” the government said. “On the other hand, the same average family now pays €100 less per year in fuel costs.”  

They also criticised Fenech for underestimating the energy consumption of families.

“Fenech thinks that a family of three consumes 3000 kwh of electricity every year while national statistics show that the average annual consumption rate of such families who live in apartments is actually 3600 kwh while that of such families who live in terraced houses is actually 4000 kwh,” the government said. 

They also pointed out that, under Fenech, an average family paid €327 more per year in electricity bills, amounting to a total of €1,650 throughout their legislature.

“The previous administration had placed an added weight of €2,850 in electricity and fuel costs for an average family over a period of five years. On the other hand, the current government’s decisions have resulted in a reduction of €230 over twenty months.”