A year of contrasts : yellow or blue LPG gas

Published on the Malta Independant¸ 9th January 2011

We are now in the 11th year of a young millennium and our destiny beckons. By now¸ we will all have forgotten our New Year’s resolutions and are resigned to the fact that we can only improve our lot and achieve our objectives by tightening our belts¸ and not by drawing up wish-lists.

The year brings increased prices for fuel¸ gas and milk products¸ not forgetting a two per cent VAT hike¸ and it is now a question of whether one buys the right coloured LPG gas cylinder¸ as some colours are cheaper. With two competing LPG suppliers¸ there is confusion over the prices approved by Malta Resources Authority (MRA). In fact¸ the increase in gas prices reached new highs at a time when voters are constantly being reminded that privatisation should lead to cheaper supplies. Another round of hefty increases in fuel prices – currently the monopoly of the state agency Enemalta – have just been approved by the MRA and all this is happening at a time when the dollar is weakening against the euro and the oil price is stabilising.

Reluctantly¸ the unions hit out at the MRA for failing to protect consumers¸ while the Chamber for Small and Medium Enterprises (GRTU) went so far as to describe the lack of a proper explanation for the increases “mistaken and insensitive”. In his article in The Times of Malta¸ Prof. Scicluna said that both auditors’ reports – the one by KPMG commissioned by Enemalta and one by the Deloitte commissioned by the MRA – based their respective exercises on a number of “questionable” assumptions and unaudited financial data furnished by the corporation. The oblique answer from the MRA¸ fully echoed by the Resources Ministry¸ supports the regulator which¸ they say¸ has the necessary expertise to establish the level of tariffs that should apply¸ even when until recently there was only one supplier. In this tug of war¸ the MRA insists that¸ through its independent auditor¸ it possesses “the expertise on matters and areas on which it has taken a position so far”.

Reacting to the criticism about gas prices mentioned earlier¸ the MRA defended its actions without publishing any economic impact studies. One may well ask why we bother to have an MRA on our national payroll¸ when such doubts arise. Granted¸ nobody would like to be in the MRA’s shoes when prices go up¸ but such austerity has to be better explained. At this juncture¸ a wicked thought comes to mind: can our political leaders lead by example and reduce their salaries – taking a leaf out of the book of the New York governor¸ who has taken a cut in salary? The opposite has happened in Malta¸ as our cabinet ministers have rewarded themselves (in a covert manner) with a €4 million rise in honoraria.

The Maltese workers¸ angry about the bitter pill of post-budget austerity they are being asked to swallow¸ argue that the €1.16 weekly wage increase awarded in the last budget is not enough to compensate families. Another bad start to 20