Monday, August 18, 2008

Malta and Gozo and why Competition is Good.
When we arrived here in the Maltese Island it was late spring early summer, we had driven here from London UK. It was around the same time that fuel prices around the world went through the roof. The countries that we had driven through included UK of course, France and Italy, throughout our journey we did see a range of fuel prices, also keep in mind that the euro against the UK pound is and was very strong.

We found that the UK had the most expensive fuel in Europe by quite a margin. £1.08 a litre (unleaded) in London in April and peaking at around £1.22 in July, (I am not going to bore you with all the prices across Europe). France was the next most expensive followed by Italy and then Malta. When I put fuel in my car on arrival here in Malta, I paid around €0.95c per litre, I thought 'petrol is cheap here'.
The difference is the amount of tax collected by the relevant governments, (85% of the cost of a litre of fuel in the UK is tax) but it also depends on how tough the competition is.

Around the world since the end of July oil prices have been plummeting. This has been reflected across Europe as competition from rival companies to continuously undercut one another, to the extent that petrol prices are falling sometimes 1 or 2 times a week in the UK as the world oil price falls. The competition for customers is fierce, there is a bottom line that they can go to but you can bet that the price is as good as it can get. As the big oil companies and the supermarkets battle for our custom, great for us, the consumer.

Enemalta supplies all fuel here on the Maltese Islands, sets the price and decides when prices should go up or down, because there is no competition Enemalta can set prices as and when they like.
Petrol compared to the rest of Europe is still cheap here, it is interesting to note that fuel prices here seem to have stuck at just below €1.20 per litre and have been this price for the last three weeks. For example unleaded petrol in the UK has tumbled in the last three weeks to £1.06 (sterling) (€1.33).

I conclude that whilst Malta is still cheap for fuel compared to the rest of Europe if you had competition from other oil companies, an open market, and rival companies were to set up here so that you would have brands like Esso, Repsol, Texaco and how about an independent Maltese brand, all competing for our custom, the competition would help the price of fuel change as the world oil price changes, and not as and when Enemalta decides that it perhaps really should think about it. Petrol here on the Maltese Islands is cheap, but it could be cheaper. Competition is good for the economy and good for the customer.......Competition is good.

"Competition is a painful thing, but it produces great results". Jerry Flint

1 comment:

marie6 said...

Thanks for dropping by my blog. I will have a proper look at your blog later. Good luck with your new life in Gozo.