Enemalta announces price revisions in fuel

Enemalta announces price revisions in fuel effective as from 2 July 2012. Enemalta explained that during the month of June, ICE Brent crude prices have come off the highs seen earlier this year. This decrease over May prices (see Figure 1), primarily on the back of slower economic growth in China – an important engine of oil demand, and the eurozone sovereign debt crisis.  So far this year Brent crude has averaged at $114.21 a barrel, which is the highest average price ever recorded for the first six month period.

Despite the fact that oil prices are currently on a downward trend, there is the possibility that Iran could still send prices back to the $100 a barrel.  In June, the Iranian oil exports have fallen sharply following the insurance ban implemented by the European Union as from Sunday. According to some oil experts, this ban will cut around 400,000 barrels a day in terms of Iranian sales over and above the 600,000 barrels a day which were already lost following the EU and US sanctions earlier this year.

According to the latest Oil Prices Bulletin published by the European Commission, as at 21 May 2012, petrol and diesel prices in Malta ranked 14^th and 16^th cheapest respectively out of the other 27 European Countries.  As presented in Table 1 below, the report also shows that consumer petrol and diesel prices in Malta are below the EU weighted averages of EUR 1.581/ltr and EUR 1.435/ltr respectively.  The published prices are inclusive of duties and taxes.

Table 1 – Unleaded Consumer Prices Inclusive of Duties and Taxes (Prices in force on 18/06/2012)

The latest European Commission report can be downloaded from http://ec.europa.eu/energy/observatory/oil/bulletin_en.htm

However, the Government failed conveniently to mention the consumer's purchasing power  when it increased the fuel prices yet again back in April 2012. The average Maltese consumer’s income is not as good as that of the average European – it’s 17 percent less, according to the latest Eurostat statistics.  So what happens when we compare the relativity between motoring costs and income in Europe to the same relativity in Malta?

Assuming that a motorist averages 6,440 kilometres per annum in a 1.2l car, his annual fuel bill will be €5,800.   That’s cheaper than the average EU consumer’s fuel bill at €6,332, you might say.  But if you then compare the relationship between fuel cost and income per head, you would find that the ratio for the Maltese consumer is 10.4 percent higher than the average European’s.  The chart shows a select group of EU countries, some of whom have a GDP per capita index that approaches Malta’s and others that are richer.  Malta ranks fifth out of nine countries.