Updated | Muscat announces fuel price lock-in, PN hits out at 'canned tuna' stunt

Stable prices for fuel announced - Video by Ray Attard

The government has struck a deal by which the price of petrol was brought down by 2c while to €1.44 the 12kg LPG cylinders will now cost €17.10, a reduction of €1.30.

The prices of petrol and diesel will remain locked until the end of year, with the price of diesel locked at €1.36.

The price of 12kg LPG cylinders, mostly used by households, will remain stable for five months.

The  announcement, for the past days hailed by the Prime Minister as “great news for the country”, was made by Joseph Muscat and Energy Minister Konrad Mizzi at Auberge de Castille.

The energy minister explained that the price of petrol will be the cheapest over the past year and cheaper than the price of petrol during May 2013 and 2012.

The price of diesel will be the cheapest for the past 27 months.

“We are beating the market. It may sound easy, but it took difficult and tough negotiations,” Muscat told journalists gathered at Castille, adding that the Maltese market could afford such a deal.

“We were forward thinking; not only because the Ukrainian crisis could destabilize the market but because doing nothing simply was not an option. Families and businesses need stability and to be able to plan ahead.”

He said that the deal, especially the one on LPG, was good news for the tourism sector.

The energy minister explained that the petrol and diesel deal was struck between Enemalta and a number of financial institutions and oil-selling companies.

“There were no country-to-country agreements but applied a number of hedges, including on the physical product per metric tonne and on the curreny,” Mizzi said.

“We had more than one period we needed to hedge on, and a number of hedges to balance the price.”

For the past months, Enemalta was monitoring the international price of fuel eight times a day.

“We have secured the best prices for our consumers and the cheapest they have been for months.”

The minister also confirmed that the government was not forking out any subsidies for the reduction in gas cylinder prices. The price was negotiated between the Malta Resources Authority and Liquigas, being the dominant market player.

The Prime Minister said the government had achieved what others thought to be impossible.

“The Cabinet was not happy with only a three-month fixed deal. Our prices are now stable. Going by the international prices, they should have been higher. Moreover, because of the geo-political situation, the prospects are not favourable ”

Reacting to questions by the press, Muscat denied this was “an overnight deal” to counteract criticism leveled by the Opposition on increase in taxes.

PN reaction

The news was greeted with little exuberance by the Nationalist opposition, dubbing Muscat’s hype on the eve of the announcement as much ado about a marginal change in fuel prices “that could have been handled in a simple press released by Enemalta.”

“Muscat is reducing what he increased in the first place: unleaded is down 2c, after it had increased back in April. He spent a week promising manna from the heavens. Even the price of 12kg gas cylinders went up in December 2013, and have now been reduced again ahead of the European elections.

“Muscat has gone back to the Labour governments of the past, when they made a palaver out of reductions on the price of canned tuna. This is not the way to run a country or treat its people,” the PN said.

The PN said that diesel, mainly used by businesses and industry, had not gained any price reductions. “Energy minister Konrad Mizzi is among those who got the PM’s ‘good news’ during the last election, when his wife was paid €13,000 monthly to ship out to China,” the PN said, referring to Sai Mizzi’s ‘investment envoy’ role in China, for Malta Enterprise.

“In the meantime, 8,000 people in Malta are without a job.”

Liquigas Malta in a staetement said it would fix a lower price of LPG in cylinders for the next five months, as from tomorrow 1st May until 30th September 2014.

The new prices will be as follows:

Distributors of Liquigas cylinders are not authorised to charge additional prices over and above the above prices.

No ‘part-privatisation of Air Malta’ at this stage

The partial privatisation of Air Malta was not on the cards at this point in time, Prime Minister Joseph Muscat said.

Referring to media speculation following his comments when he compared Air Malta to the state energy corporation, Enemalta, Muscat insisted that he only meant that the national airline should return to be “a motor which turns the economic wheel”.

“There is a deal with the EU on Air Malta, and this has to be seen through. Like Enemalta, Air Malta was an albatross round the country’s neck and, like Enemalta, I am confident we can turn it around,” Muscat said.

According to Muscat, this could be done by increasing Air Malta’s operations in the Mediterranean region.

“Air Malta currently flies North, with very few across the Mediterranean region. We have the opportunity to be the perfect place of connection between the Mediterranean and the rest of the world.

“There are no plans for part-privatisation at this stage.”