Updated | Fuel goes down 4c on Monday, PN leader says 'not enough'

Energy minister announces fuel price cuts

Fuel prices will go down by 4c on Monday with planned further reductions to follow in the coming months.

In a statement, the Ministry for Energy explained that Enemed this week closed a number of transactions which will result in a reduction of both petrol and diesel prices at the petrol stations.

As of Monday, petrol prices will be reduced from €1.42 to €1.38 while diesel prices will be reduced from €1.35 to €1.31 per litre. Further reductions will be announced over the coming months.

After securing lower+stable fuel prices over the past months, the first in yet another series of price cuts will come into effect in Feb -JM

— Joseph Muscat (@JosephMuscat_JM) January 31, 2015

Speaking to MaltaToday, Energy Minister Konrad Mizzi said Enemed closed a number of deals on both fuel and currency prices which made the seventh reduction in this legislature possible. The reductions will come into effect before a number of previous hedging agreements come to an end: "This means that the consumers will benefit ahead of the cheaper prices before the new agreements come into force."

Due to commercially sensitive information, and because the domestic fuel market is liberalized, the minister would not say what the ultimate reduction in prices will be. "All I can say at this stage is that the prices will be significantly cheaper," Mizzi said.

Glad to hear that @JosephMuscat_JM succumbed to our pressure BUT 4c is far from enough. Fuel prices in #Malta still 4th highest in #EU.

— Simon Busuttil (@SimonBusuttil) January 31, 2015

Opposition leader Simon Busuttil said he was glad that the goverment had succumed to the PN's pressure. "But 4c is far from enough. Fuel prices in Malta are still the fourth highest in the EU," he said in a tweet.

In a statement, the PN said the decision to cut fuel prices by 4c was "risible".

"This is nothing but a mockery, because the cuts do not reflect the prices that other families and businesses in the EU are paying. Government's prices remain higher than the EU average. Maltese families and businesses will still be paying the EU's fourth highest fuel prices on Monday. They deserve better than that. At the very least they should be treated the same as their EU counterparts.

"It is obvious that this decision is down to our pressure, and not because the government really wants to reduce prices. Today's decision confirms how right the Opposition was in insisting that fuel prices decrease."

Amid criticism by the opposition that the government had forced consumers to pay higher prices even though the international price of oil had fallen to over $50 a barrell, Mizzi said the government had always worked to give consumers the best prices: "In fact, this is the seventh reduction coming into force during this legislature. But what I can ensure is that Enemed and the risk committee always hedged at the cheapest price possible."

The energy ministry pointed out that the announcement of price reductions came when the price of Brent crude spiked upwards by 8% to $53. "This is the highest spike in daily oil prices since 2009," the ministry said. "In 2014 Malta benefitted from reduced fuel prices and stability which contributed to a reduction in inflation and further economic growth."

It said that this contrasted significantly with the previous administration where in the second half if 2008, oil prices dropped by 51% while energy prices increased by 20%.

"Today the Opposition does not have a plan for the energy and it did not even take a position on whether it prefers fuel price stability."

Mizzi insisted that the government was providing families and business with stability, done by hedging on a short-term basis while constantly monitoring the markets.

Opposition leader Simon Busuttil this morning insisted that the government should reduce prices even though it may not reflect the hedging agreement. "Why should the consumers bear the brunt of wrong hedging? Under the previous administration we had a mechanism by which prices would fall when the international price of oil went down," Busuttil said.

But Mizzi insisted that Enemalta had not hedged for fuel for the last five years under the previous administration.