Government went from policy direction role to trader selection in fuel hedging - PN
● Ministerial direction averted an increase in prices - government
The PN yesterday said that government went from policy direction to trader selection, adding that Minister Konrad Mizzi intervened in dealing with SOCAR for fuel hedging.
PN MPs Marthese Portelli and Claudio Grech said the Maltese public is paying for the government’s mistake on fuel hedging, highlighting that Malta still has the highest unleaded fuel price in Europe and the third highest for diesel.
They argued that the National Audit Office report shows that the Audit Finance Board was not making decisions that resulted in a loss of funds until the two hedging agreements where “ministerial intervention” took place.
In response to questions relating to claims that hedging created stability for businesses, the two MPs said that businesses would have benefitted if hedging was done in a proper way.
Dr Portelli said that during a meeting the Opposition held with MCESD members, the President of the Chamber of Commerce said that while stability is good for business, business will only benefit if the stable price is one that is competitive.”
Turning to the lack of documentation, the PN MPs argued that these were the only hedging agreements where documentation was not adequate. As a result, they called on government to publish all documentation relating to hedging agreements.
Asked about the Giovanna Debono case, PN MP Marthese Portelli refused to comment, stating that she was not the police.
Ministerial direction averted an increase in prices - government
Meanwhile, in a statement, the government said it’s track record in fuel prices is reflected by eight reductions in the price of petrol, six reductions in the price of diesel and fuel price stability.
The direction provided by the Minister to Enemalta to stay in the market and widen the suppliers’ pool in 2014, averted a 2c increase in price in both Petrol and Diesel and this resulted in a 2c drop in petrol whilst the price of diesel remained stable, the government said.
The government also said the Opposition made no reference to significant hedging gains made by Enemalta in 2014 on currency hedges which amount to €8 million. In addition to these gains, Enemalta registered hedging profits of €5 million for the first three quarters of 2014. As stated by the Auditor General, losses on product hedges were registered in Quarter 4, due to a significant change in oil prices, “which were not and could not have been anticipated when such agreements were entered into”.
The Opposition conveniently does not mention the losses incurred by Enemalta under the previous administration, such as the ones in 2009, which losses amounted to €49.5 million, said the government.
“It is clear that the Opposition has no policy on fuel prices and price stability for consumers,” the statement concluded.