Thursday, 15th May 2008
Surcharge to rise
Finance Minister Tonio Fenech yesterday admitted that a rise in the utilities surcharge after next month is inevitable.
Speaking to The Times following a meeting of EU Finance Ministers in Brussels which discussed the high oil and food prices and their effect on the European economy, Mr Fenech said the current oil prices are unprecedented and will definitely have an impact on the Maltese economy.
"Currently, Enemalta is concluding various agreements, including hedging contracts, in order to assure the supply of oil for our power stations for the coming months.
"Although we are not buying oil at the current rate of $127 a barrel, we are still going to end up paying much more than a few months ago. This will obviously affect the surcharge," he said.
Pressed to state whether there will be a steep rise after next month, Mr Fenech said "a rise is inevitable at this stage".
"The government will do its part to try to cushion the effect but, unfortunately, everyone will still have to pay more."
The current surcharge level has been maintained at 50 per cent since last December following hedging agreements entered into by Enemalta for the supply of oil until the end of next month.
The surcharge will now be revised upwards to reflect the higher price to be paid by Enemalta for oil.
The highest ever surcharge since its introduction in 2005 was in March and April 2006 when it peaked to 67.5 per cent (see table). The government is keeping an eye on the current trends in world oil prices as these will also affect its budget deficit which this year is projected to go down to less than two per cent of GDP.
"We are obviously concerned about the international situation. As the price of oil goes up, so will the government's bills. However, we are still confident that we will stay within our deficit targets. This is a challenge but through good budgeting, we should reach our objectives even this year," he said.
Following yesterday's Ecofin (Economic and Finance Ministers council) meeting, EU Economic and Monetary Affairs Commissioner Joaquin Almunia said all of the eurozone ministers and the European Central Bank are worried about the high level of inflation.
"We are suffering strong external shocks from the oil price, food prices and other commodities, so I think everybody is concerned," he told a press conference.
Despite slowing growth, the ECB has kept interest rates on hold since mid-July last year to keep inflation in check. Slovenian Finance Minister Andrej Bajuk, whose country holds the rotating EU presidency until the end of next month, praised the ECB's response to the challenges facing the eurozone economy.
"Nobody has inflation under control but we are very happy with the way the European Central Bank has been reacting to the problems... and we expect it will continue doing that," Mr Bajuk said.
RSS
Comments
Listen to this and keep it in your minds.
THERE WILL NEVER EVER BE A NUCLEAR POWER STATION IN MALTA! End of.
It's shear madness to gear your brains in this way!
What happens if there is an even the smallest of a nuclear fall-out? No problem the whole of the Maltese would be wiped out with cancer.
We shouldn't even be thinking about this never mind where the money is going to come from.
Oh, and where would one build this state of the art Nuclear power station? In your back yards maybe? Cause everything we do nowadays is flipping state of the art, isn't it!
Let me give you just another reason why NO,NO,NO,NO for such things on our Island.
In UK such a power plant has to be at least 35 miles away from houses. Now where would that be in Malta eh?
How about this no good for nothing administration starts serious discussions with Italy so that we can negotiate to supplement our energy from Sicily, just what Karmenu Mifsud Bonnici once suggested in the late 80s?
Pajjiz tal-Mickey Mouse, that's what we were, that's what we are, and that's what we shall always be!
Iran, Saudi Arabia, Bahrain, UAE, Kuwait and other oil producing countries in the Middle East have started their own nuclear energy programmes knowing full well that their oil supplies are dwindling.
The President of Iran, erratic as he may be, is on record as sayng that the "fair Price" for oil is 200 USD per barrel. The only way for the price of oil is up.
UK and France have stepped up their Nuclear energy programme to reduce dependency on fossil fuels.
The above are only some facts that come to mind.
It is time to wake up to the fact that the energy of choice now and in the future is Nuclear energy. Somone in Malta needs to take the bull by the horns and make a plan for nuclear energy. If not, we will be struggling with the price of oil and probably be left in the dark in less than 10 years time.
Then perhaps, the environmentalists, socialists and all who cry foul every time the N word is mentioned, and who cannot distinguish between Nuclear energy and Nuclear bombs can give us some space in their caves near their wood burning bonfires.
Otherwise, if we take Berlusconi's option, we will built our own Nuclear Energy Plants, and have more supply than the Maltese demand, therefore selling the surplus energy to our neighbours Italy!
It our governments start "collecting" the Surcharge we are paying, and direct it to a "Special Fund" to invest in these ideas....someday we will be there! Otherwise we will continue being behind our European counterparts!
As for the short sightedness of the EFA administration when they decided to build the Delimara power station, they should have thought of cheaper alternative energy sources then. What did they do? Sank 380 million liri in a black hole at Bormla, to keep unproductive workers sand blasting the same oil tankers which carried the same the black gold which now Malta have to pay through their noses to switch a light bulb on!
Also there are alternative energy sources that can be built in Malta. For example the local shipyards defenitely have the potential to build wind farms. Alternative energy does not have to be photovoltaic panels.
On one hand we heard it year after year after year that our Government is committed to alternative energy and does zilch, but then we get an expert that is giving a lecture that bio fuels are not the alternative. How one comes up with such theories to justify the gross incompetence and financial disasters of a Government, is beyond ones imagination! By the way, unlike to what one thinks, bio fuels are NOT environmentally friendly, but they are only renewable energy. No obnoxious excuses can justify the disastrous economic situation that we are in!
Who pays directly or indirectly for ALL street lighting, roundabout lighting,shop windows and showroom lighting, All public places lighting and energy sources - schools , local councils,hospitals,airports,
All shopping arcade lighting, All landscaping lighting,
All historical sites lighting , All restaurant lighting,
Answer - All taxpayers.
From all that I mentioned above there has to be something which can be powered by solar panels - street lighting for example .
One does not need to dig so deep to start - just start and continue until all resources which can be powered by solar energy and converted to do so.
Successive Nationalist Governments have practically ignored the problem except for one weak effort at wind energy. . Years ago after attending a leadership Conference in Washington DC i came back with a project that had been implemented by the Americans in India for a community fo 2 million people. It was called " Peaking Power". That meant substituting oil fired energy with solar power when public energy consumption peaked, saving fortunes in oil purchases. I handed the project over with fulll documentation to the then Parliamentary Secretary for energy George Hyzler. I must have caught him on siesta time because nothing ever came of it.
For the first time ,seriously, one Nationalist Minister is putting his shoulder to the wheel to find a solution or solutions to the problem. I believe Austin Gatt when he decides on something. He is a doer. I will wait and see how long this will take to make the right choices and whether the Minister is interested in hearing from anyone and everyone who can contribute or whether this is already a closed shop operation
The benefits would be that it would reduce greenhouse gases as well as reduce the pressure on oil and biofuel, pushing their price down and hence making alternative energy less attractive to the normal citizen - basically a catch 22 situation.
No programme to look into solar, wind and hydro generated energies. And fuel prices increase from abroad. And what? Still ... no programme to look into solar, wind and hydro generated energies.
That's the saddest part of the story, that our Government is leaving it in the hands of investors to look into this matter, as if it will take the common entrepreneur to open a solar power generator that will be large enough to soften the burden of increasing oil prices!!!
Come on Gov! Just take Filfla and convert it into a solar or wind station! We DEFINITELY need to look into this matter before prices rise higher!!!! We as taxpayers CANNOT CONTINUE TO PAY for the Government's nonchalant attitude in this matter!
Tax us more cause as once Eddie said, (The Maltese are happy to pay more tax to get the Government finances in order.)
Oooops - that was 10 years ago! and after 9 years of PN as well.
What happened to the Government finances since then?
Give it to us cause we get what we deserve most.
S .W. A .T.
We love it, bring it on!
Admittingly, alternative energy sources come at a cost, however one can only imagine the cost of Oil based sources running in millions. What about having invested into an R&D organisation for this specific purpose rather than rely on university little resources to do so. What we need is a fully fleged effort now, investing in wind, wave energy to at least offset some of the surcharge from natural resources.
It is all well and good pushing consumers to install solar water heaters and stuff like that, but this island has developed into an apartment jungle. People living in flats dont have the space or the authority to install a solar water heater (which takes quite some space) on the roof. So it is up to the government to do the largest bit into this exercise. We have large unused spaces for example in comino. What about used some space for windmills and solar panels there which could connec to the national grid ? Wave energy ? How many times have you seen the waters calm around Malta ? Very few times I suppose.
Water outlets from reverseosmosis plants ? I've seen one churn out water (assuming its either cooling water for the plant or churning out water which is too salty) like a raging river. Cant some sort of turbine been installed at such outlets to generate electricity and use it to offset some small proportion that the same power hungry plant uses.
Expropriate all the land that was illegally taken over by squatters building boat houses at the north and install solar panels instead. Rather than accomodate them and legalise their position as this governments about to do for people who built there pre-1992 ! Wake up sur gvern.
Joseph
But this does not explain, for example, how in the first three months of 2008 the deficit already reached the €210 million mark (i.e. Lm90 million compared to Lm54 million last year).
Furthermore government is already charging a 50% surcharge on electricity bills to counter the effect of higher oil prices (prices at which oil was bought supposedly last December) on public coffers.
I truly understand that government needs to keep a close watch on fuel prices so as to minimise the risks of this item on our budgetary targets. But it should not blemish just this if it fails to reach its budgetary targets this year.
Government knows for example that it is failing in getting all the funds made available from the EU. For example, last year government contributed around €50 million to the EU whilst just managing to get around €55 million in the form of grants. This means a net positive effect on the government budget of just €5 million. The picture for the first three months of this year shows that the situation might be much more worse for 2008 if government is not careful enough.