New fuel hike, GWU warns of drop in purchasing power

The GWU said the Malta Council for Economic and Social Development had to discuss a report on the fuel price increases by March. “GWU expects this discussion to take place in the April meeting, and we expect a just compensation from government.”

The MRA approved price increases by Enemalta to reflect the prices for the latest shipments of imported fuel. “The Unleaded and Diesel prices also reflect the increase in petrol stations’ maximum retail mark-up as approved by the Malta Recourse Authority.”

The February Unleaded and Diesel consignments were both based on March Platts prices which were higher than the previous delivery pricing basis, as a result of the unrest in the Arab world, and particularly the civil war in Libya, which have significantly impacted the price of crude oil. 

Benchmark Brent crude oil has been on a sharply rising trend, increasing by at least 10% from an average level of $104/bbl in February to an average level of $115/bbl in March.  During the month of March, Brent crude hit a level of $116/bbl, the highest level recorded this year.

“The conflict in Libya has taken a serious toll on the global fuel economy. Libya is responsible for only 5% of the world's oil supply but is heavily involved in the refining industry. According to analysts, as long as the turmoil in the Middle East continues, it is expected that fuel prices will continue to soar,” Enemalta said.

The prices of petrol and diesel are influenced directly by the price of oil in international markets and thus fuel prices have risen alongside with Brent crude.  Petrol Platts prices (CIF Med, Premium Unleaded 10ppm) increased by 9.3% from an average price of $913/MT in February 2011 to an average level of 998 $/MT in March 2011.

Diesel Platts prices (CIF Med, Diesel 10 ppm) increased by 10.8% from an average level of $908/MT in February 2011 to an average price of $1006/MT in March 2011.

The increase in the price of oil is compensated by a 2.5 % drop in the US dollar's exchange rate to an average rate of $1.3985 in March.