Enemalta's arithmetic

My esteem for Prime Minister Lawrence Gonzi and conviction that he is the right person to lead our government in facing up to the enormous challenges facing our nation rose as I followed his 2005 budget address on TV.

This, may I add, despite the fact that, as a pensioner very much dependent on kerosene for home heating, I have been hit hard by the doubling of the price! I accept this as being one of the many brave decisions made by the government aimed at spreading as widely as possible the burden of getting Malta on its feet again.

Having said that, I must confess to being somewhat perplexed by the seemingly innocuous statement that Enemalta is being very magnanimous by absorbing Lm8.3 million (52 per cent) out of the estimated additional cost of Lm16 million that the corporation is expected to have to bear (up from Lm32 million to Lm48 million) for its 2005 oil purchases, assuming that the current high price of oil persists on the international markets.

The rest of the increase (Lm7.7 million, or 48 per cent) is to be passed on to the consumer by way of a surcharge. But my question is did not Enemalta make substantial savings over the past couple of years through the substantial fall of the value of the US dollar against the Maltese lira?

A rough calculation based on the exchange rate between the two currencies indicates that the dollar fell against our currency by about eight per cent over the past 12 months and by no less than some 20 per cent over a two-year period. So if Enemalta's oil purchases are reckoned to be Lm32 million this year due to the rise in the price of oil, has the corporation, on the other hand, not already benefited from very significant cost reductions over the past two years through the fall of the dollar?

I hasten to say that these are only crude calculations. Still, they do highlight what I consider to be a significant point that appears to have been pushed under the carpet by Enemalta and by the Prime Minister's advisers who drafted the budget address.

I should think that all Enemalta's clients, other than the 11,000 households who will not be affected by the hefty 17 per cent surcharge, deserve an explanation by the competent authorities.