Fabian Demicoli

The fuel hike issue: Reason must prevail

 It is something surprising for the GRTU, that after having survived the recession without having suffered irreparable damage and ended up in trouble like it has happened in countries as Greece, Ireland and Portugal, in Malta we still have not managed to reach an agreement nationally to mitigate for the waves of increases in the prices of energy products such as oil, gas oil and gas that we have to necessarily import. To make things worse we have not even arrived to an agreement to meet regularly to discuss the issue.


It seems that the only answer there is to the issue concerning repeated and economically unsustainable price increases is that the authorities fail to come up with another package of calculations that would alleviate the impact of the results of this Mechanism. It's like the recession has thought us nothing, it seems that Government's work is simply to see what the market throws at us and act as a transmission belt and pass everything to the users and consumers. Government seems to be preoccupied only with how the prices from outside will hit Enemalta and nothing is calculated on how it will affect everyone else in the country. Government seems to feel incapacitated to find other ways of how to mitigate the impact on the whole economy without risking further Budget deficit expansion.

GRTU is in no way convinced that simply hiding behind what the Authorities call "the price mechanism" or "formula" is good enough. We have seen this happen in several other scenarios where authorities are easily bought over to accept prices and then following pressure from competitors we find that the prices approved are after all not the minimum. What is the formula that is giving prices today that are higher than when the price of oil on the international market was at its highest? Over and over again we reiterate that MRA's role is not of looking after the interests of Enemalta but should be measuring the impact of price increases on enterprises and the economy as a whole and recommending to Government appropriate measures to mitigate what may be impossible to hold i.e. price increases that would sustain even the challenge of competition. Enemalta would not have the cost structure it has to carry if it were privately owned and the efficiencies are never measured against established international benchmarking.

We do not agree with payments that Government cannot guarantee that the sum will not add up to the Budget Deficit or that does not lead to new taxes or that widens the welfare gap. If Government spends money, the way to make up for it is to reduce other of its costs. "GRTU does not argue about the increases but the system Government is using. It is unfortunately incompetent, non-participative and unaware of people, businesses and the whole economy. There is no nicer way to put it…it's a kiss my … approach" commented Vince Farrugia, GRTU Director General.

The GRTU appreciates that this is a difficult problem, but precisely because it is difficult, GRTU does not believe that we should not discuss it on a national level and before taking any decisions we would at least be convinced, as social partners, that for what is coming there was really no other way. GRTU firmly believes that it cannot be that whenever we learn about such hard decisions as is to raise sharply the price of diesel, gas oil and liquid gas, we hear of these decisions without having being given any kind of explanation other than "because the pricing mechanism of products of energy so indicates."

Why do we have the MCESD? What harm would have been done if before these new weights were issued we would have worked on the economic impact and proposals of how this can be mitigated? It was certainly not impossible to brainstorm together what taxes we could have arranged and shifted or the creation of some kind of incentive to promote the change in the use of energy.

In this day and age how does Government present us with the excuse of the mechanism and it is not able to be more innovative in it'd choice of solutions?

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