Following the approval of the Malta Resources Authority, the Enemalta Corporation has announced an increase in the price of LPG products as from tomorrow, Monday the the 1st of April 2009. The company said that the new prices do not recover the full cost of the product and the difference is being covered by a monthly Government subsidy which is to be €150,000.

The subsidy for February and March (the coldest months of the year) added up to a total of €800,000.

The new prices are as follows:

Enemalta said it’s price review proposal to the regulator was requested in view of the fact that the retail price at which LPG was being sold did not even recoup the direct costs of the product as can be clearly seen in the graph below. A 12kg cylinders costs €9 to produce but was retailed at €5.40.

In submitting its proposal to the MRA, Enemalta based its workings on the price of LPG forwards, Enemalta’s cost base for its Gas Division and the expected sales of LPG & Propane for 2009.

In it’s calculations, Enemalta estimated that the various LPG gas cylinders would have to increase on average by €0.40 per kilo (including 18% VAT).

On direction of Government, Enemalta is not passing on the full increase to consumers but the retail price is being increased by €0.167 per kilo (including 18% VAT) instead of €0.40. The remaining shortfall will continue to be subsidized directly by Government. .

The following table reflects the current selling price, the price approved by the regulator and the price being announced following Government’s decision to subsidise the difference: