Is the latest fuel increase a straw too far for industry and tourism?
In the latest revision of the fuel tariffs by Enemalta Corporation last Monday week, the price of petrol remained unchanged, and the price of diesel went up by 1c per litre to 97 euro cents a litre. However the price of Thin Fuel Oil, which is used extensively by industry, has rose by an average of 40 euro cents a litre. How will the latest fuel increases affect different sectors of Maltese society? How will inflation be affected as a result of the latest fuel hikes? Are the social partners happy? CHARLOT ZAHRA asks the social partners
Vince Farrugia, Director-General, GRTU “Somebody should be giving a good whipping to the MRA”
What is the GRTU’s reaction to the fuel increase announced by Enemalta last Monday week? In the GRTU’s view, are these excessive increases? In the current circumstances, government should have refrained from approving these increases. A lot of small enterprises are already really squashed and the market has not only not settled for the majority of small establishments, but continued to worsen.
After all the talk about inflation and empty talk about price controls, it seems that this only counts for small private enterprise, and for a giant like Enemalta, nothing is sacred when the impact of fuel increases, such as the gas hike, is high when inflation is measured.
Those that are getting hurt out of this are the owners of trucks that carry construction materials, waste carriers and port workers which are all represented by the GRTU.
Almost all of them have a fixed contract and few of them have diesel escalation clauses in their contracts so they will have to bear the brunt of the increase on themselves because they cannot pass on the increase to someone else.
And in the current circumstances, when everybody is cutting down prices in order to survive, who can afford to increase his prices?
How do you think that this increase will affect Maltese SMEs? Do you think that Maltese SMEs can afford more burdens in view of the recession that has already hit the country and the high inflation that has already increased substantially? The small and medium entrepreneur is currently getting whip lashed from everywhere. The Government should be helping by increasing its expenditure to keep the economy going round and compensate for the decrease in private expenditure.
However this has not really taken place and this on its own is squashing a lot of retailers and service providers, but worse than that, when it should be helping it is instead remaining inactive, despite the fact that we have public regulators like the MRA. In my view, this is a charade.
Were you consulted by the government before the increases were announced? They tell you that they are increasing and that’s that. The MRA should be studying the impact when Enemalta applies for a rise and the MRA should measure the economic impact and consults if there is the need to.
It is then that it should make its recommendation to Minister Pullicino and then he consults with the other Ministers whether in the current circumstances, is it justified to implement the MRA’s recommendation.
I do not know what the MRA has done and what it has concluded. It does not tell us for sure. The public regulator should publish its recommendations. We should now be living in the age of transparency!
If things are done properly, then we do not expect any preferences. I have been saying for a very long time that somebody should be giving a good whipping to the MRA.
Will the GRTU be making any type of representations with the government following this increase in fuel prices? What will you do?
Complain at the MCESD like the others. What should we do: chain ourselves to the front door of Castille? Everybody wants us to take action and everybody wants to remain silent. The truth is that if we do not insist together in a more vivid way so that the public regulators do not remain like statues, the situation will remain the same. If the prices increase abroad, then the prices in Malta will also be increased – whoever can afford will pay and who cannot afford will complain.
What kind of compensation will the GRTU be asking in view of the increase in inflation that this hike in fuel prices will bring about? Our people, when they can, take the compensation on their own by rising prices. But nowadays few can afford to do so and this is not a question of asking gvernment to save you or reduce your taxes, because the reply is spontaneous: who will be making good for this? We would have expected government to at least revise the high level of indirect taxes that there are on fuels to counterbalance the price increases from abroad and the consumer would not be impacted twice – an increase in the price at the pump and an increase in the objects and services that one pays to make good for the increase in fuel prices.
The increase in fuels for boilers will continue to hit negatively exporters and hoteliers who are already ending the summer in deep trouble.
I hate moaning because everybody likes to moan in this country, however when you see something like this, where somebody has started imposing price hikes as if they were nothing, then on behalf of the thousands that I represent, I complain like everybody else since nobody has spoken to us to offer a solution.
William Portelli, President, CMTU “I do not exclude that the CMTU will insist on a process of consultation during the discussions that are taking place on the 2010 Budget”
What is the CMTU’s reaction to the fuel increase announced by Enemalta last Monday week? At present, every kind of increase, small or big, is not welcomed by anybody. Employers will have to shoulder the burden of new expenses while employees will equally have to shoulder that burden.
Everybody will be feeling the burden of this increase and all the social partners will have to make a joint effort together with the government and the opposition to solve the eternal problem of energy once and for all.
How do you think that this increase will affect Maltese families and low-wage earners? Do you think that these sectors of society can afford more burdens in view of the recession that has already hit the country and the high inflation that has already increased substantially? The CMTU’s reaction to the announced fuel increases is a negative one. We however have to focus more our attention on those elements that are leading to this unfortunate state.
At the same time, we have to admit that Malta is what it is and in many occasions, we suffer a bigger impact since we do not have any natural resources and we depend a lot on importation of food and drink as well as of our energy supplies.
Were you consulted by the government before the increases were announced? The formula seems to be the same one that was used recently and which should incentivate those who are disciplined in their consumption.
However we cannot confirm this because we were not consulted beforehand. I do not exclude that the CMTU will insist on a process of consultation during the discussions that are taking place on the 2010 Budget.
The CMTU expects that consultation should always take place when the increase is high and it hurts. I therefore think that the formula for the revision of fuel prices is revised to enable this to take place.
Will the CMTU be making any type of representations with the government following this increase in fuel prices? The CMTU is always ready to ask for an update on what is leading to every increase which looks higher than usual and as we have already said, we expect the authorities should be ready to give all the necessary information so that we can evaluate the position better for the benefit of the workers and their families.
At that point, we will then decide on what type of representations we should make.
What kind of compensation will the CMTU be asking in view of the increase in inflation that this hike in fuel prices will bring about? We have already started discussing this issue internally and we will not make any representations before we have the full picture.
What is sure is that the CMTU will strive for a kind of consensus to be reached and there is balance in the decisions that are taken.
We have to make sure that the decisions that are taken are wise decisions that offer a balance between what is related to work and how sustainable is the business, and that counts for every sector.
This should be done without losing the possibility, both in business as well as in economies generally, of registering a positive growth.
Sustainability, work, productivity and money in hand for the consumer should always be on the agenda, however this must be accompanied by discipline in public spending and a serious commitment from everybody, especially those who have the responsibility of leadership in their respective sectors.
Kevin De Cesare, President, MHRA “We are concerned that there is no transparency whatsoever with these increases”
What is the MHRA’s reaction to the fuel increase announced by Enemalta last Monday week? MHRA is surprised – the circa 11 per cent higher cost of fuel oil will add more costs to an industry which is struggling under the weight of the international recession.
It seems that the government is not understanding the bleak situation the industry is in.
How do you think that this increase will affect Maltese hoteliers and restaurateurs? Do you think that Maltese SMEs can afford more burdens in view of the recession that has already hit the country and the high inflation that has already increased substantially?
These increases will add more pressure on hotels and restaurants, most of whom are unable to pass on any increases whatsoever to the consumer. We have warned the government of dire consequences to the industry if any more taxes or costs are added to our already high taxes.
Were you consulted before the increases were announced? As MHRA we were not directly consulted but through MCESD we have been voicing our concern on any increases in 2010.
We are putting our points through MCESD but we have our recommendations which are being presented to the Minister of Finance for the forthcoming budget.
We are concerned that there is no transparency whatsoever with these increases.
Indeed MHRA was surprised to note that Enemalta gave the rise in the price of crude oil as being the reason for the increase when in the recent past when the price of crude oil decreased Enemalta had said that this is not the benchmark to be used to price fuel.
The government needs to control Enemalta and its inefficiencies as it seems that when oil goes down it is not reflected in its entirety back to consumers
Will the MHRA be making any type of representations with the government following this increase in fuel prices? MHRA has been making representations with government over the past months as one government-induced increase has followed another and will again make representations in this case also.
What kind of compensation will the MHRA be asking in view of the increase in inflation that this hike in fuel prices will bring about? MHRA members are competing internationally and government has to understand that every time there is a government-induced cost the industry suffers as it becomes less competitive.
If the matter of competitiveness is not addressed, there will be reached a stage when the industry will start contracting. We have had a weak 10 months with dropping occupancies with rates plummeting as much as 30 per cent in some instances.
We just cannot afford any increases of any kind during the next 12 months as many hotels are already planning to close this winter both in the north and the Sliema/St Julian’s area.
Any sort of new taxes will just see some of hotels over the edge and then we will see serious job losses.
Tony Zarb, Secretary-General, GWU “The manufacturing sector has been given another shock with the introduction of another exorbitant tariff for industrial oil”
What is the GWU’s reaction to the fuel increase announced by Enemalta last Monday week? The government does not seem to be sensitive to the burdens suffered by workers and their families who are even losing their jobs as a result of its decisions to continue saddling industry and enterprises with more burdens.
While the manufacturing industry is currently passing through such huge difficulties that in the last few months more than 1,000 jobs were lost in this industry, this sector has been given another shock with the introduction of another exorbitant tariff for industrial oil.
In fact, the price of Thin Fuel Oil, which is used by industry, rose between €41 and €46 per litre, an increase of almost 11 per cent from the previous price.
In view of this, the General Workers’ Union (GWU) expresses its disappointment at the manner in which the government has continued to saddle more burdens on industry, particularly manufacturing, at a time when industry is facing difficulties and when it needs help, rather than imposing more burdens on the sector.
The increase in fuel prices will increase production expenses at a detriment to the country’s competitiveness.
The Union is also concerned that this increase in fuel prices will threaten more jobs in various sectors of the economy that have already been hit hard by international recession such as the tourism sector.
Despite the fact that the government claims that it does not have control over the inflation rate, at the same time the same government is itself causing more inflation with its unilateral decisions.
The rise in the price of diesel for the consumer will surely put under further strain the pockets of many Maltese families and consumers.
The GWU is convinced that the price increase of diesel, a only a few weeks after a hefty increase in the price of gas, will definitely continue having a negative impact on the cost of living, especially in view of the fact that a lot of businesses use diesel in their operations.