Electricity and water tariffs must go down

Many people, especially those who started receiving their electricity bills, are still wondering why the fuel prices went down but the utility tariffs have not. The situation seems to be unclear for everyone, except for the government and for the Nationalist Party strategists. In a time when we are seeing substantial declines in the international oil price we are being faced with utility tariffs which are far higher than what we have had to pay for when the international oil price was soaring sky high all over the world. People are still waiting for a plausible and precise explanation from the government.

In December 2008, Malta once again registered the highest inflation rate in the euro zone area. The Maltese consumers last year experienced a 4.7 per cent increase in prices which is three per cent above the euro zone average. The sector housing, water, electricity, gas and other fuels saw a rise of 16.1 per cent over December 2007. All this means that one year ago, when the oil price was being sold at $100 a barrel, we used to pay 16.1 per cent less than what we are paying now for our utility tariffs, in a time were the international oil price is below $45 a barrel. No wonder why everyone is asking what is keeping the government from revising the new utility tariffs.



I think the answer is quite simple and straightforward. It was not true that the utility bills were raised because of the increase in the price of oil; the reason is the result of the government’s inefficiencies and the profligacy that followed the general election. Another possibility for withholding the revision could be pure political mileage. Prime Minster Lawrence Gonzi knows quite well that the electricity and water tariffs must go down in order to reflect the current oil price, but he wants to revise the tariffs at a later stage, in a time when the European Parliament election will be closer. After all this strategy is not new, something similar was adopted for the last general election. If the latter is the case, we will have another affirmation of what an insensitive government we have and to what extremes he is able to get to for exclusively political reasons.

Going back to the latest statistics on inflation published by the Eurostat and the National Statistics Office there is another aspect which deserves a mention. The biggest difference among sectors between Malta and the euro area is again in the housing, water and electricity index. This sector in Malta experienced a rise of 12.5 per cent above the eurozone average. All this leads us to another imperative question, which is: why is this happening and who is responsible?

I have a pretty clear answer.