NEWS | Wednesday, 01 August 2007

Diesel creeps up further

Surcharge rises to 50 per cent – government subsidises 25 per cent increase

Gerald Fenech

The price for one litre of diesel went up again for the third straight month and now stands at 42c6, an increase of 0c6 over the price in July. This was announced yesterday by the Ministry for Investment, Industry and Information Technology in the usual monthly review of fuel prices which has become a headache for consumers and businesses alike.
In a separate press release, the Ministry also announced that the Fuel Surchrage for the months of August and September will rise to 50 per cent, a 5 per cent increase over the June/July rate. However, the government also announced that it would be subsidising the surcharge by 25 per cent as with current international oil prices, the surcharge should have risen to a whopping 75 per cent.
Prices for leaded and unleaded petrol have remained stable at 46c3 and 49c3 respectively whilst kerosene is also up by 0c7 per litre. However there were steep increases for Thin Fuel Oil which rose by Lm 6 per metric tonne to Lm 155 for 200 deg type, Lm 6.50 to Lm 145.50 for 450 deg type and Lm 8 to Lm 148 for 950 deg type.
In graphs published by the ministry, one can clearly see that the average monthly price for fuel oil has risen to USD 411 per metric tonne, which is an all time record. The hedging formulas adopted by Enemalta together with government subsidies of around Lm 1 million have kept the surcharge rate stable as it would have reached 80 per cent according to international oil price fluctuations.
The government also announced that it would be investing in hedging agreements worth USD 2.2 million whilst it would be subsidising the oil price increase with an additional Lm 1.7 million. All the other increases will be subsidised by Enemalta.