Energy bills now list ‘savings’ from government subsidies on electricity

Households receiving their water and electricity bills will start receiving a letter informing them on how much they saved through government subsidies.

“Your water and electricity bill will now include details of the savings that you make on each bill. This change will not affect any other aspect of your bill. The only difference is that you will be able to see exactly how much you have saved compared to what you would have had to pay if prices had been allowed to fluctuate according to international prices,” the letter reads.

The letter, enclosed with the ARMS Ltd. bill, informs households on the amount they saved through the government subsidies on energy.

“The government is committed to making decisions that do not add financial burdens to local families and businesses,” the letter says.

The letter, enclosed with the ARMS Ltd. bill, informs households on the amount they saved through the government subsidies on energy

This is the first time such letters have been sent to households since subsidies started being rolled out in 2022, after the price stability agreement with Electrogas expired and government rolled out subsidies to keep consumer prices stable at 2014 level. It also coincides with the European Parliament elections this June.

The government has remained committed towards continuing the subsidies despite warnings over its sustainability.

The International Monetary Fund (IMF) earlier this year recommended Malta phase out energy and fuel subsidies while increasing targeted support for vulnerable households.

The recommendation is made in the IMF’s latest review of the Maltese economy and governance structures released on Tuesday by the Washington-based organisation.

The IMF’s executive board said energy subsidies placed a substantial burden on the budget and this “limited fiscal space” for supporting productivity-enhancing reforms and blunted incentives for energy saving.

The recommendation follows a similar one made by the European Commission last year. Government is subsidising the price of electricity, fuel and LPG gas to the tune of €350 million in a bid to keep prices stable.

Government has said it will maintain the subsidies until 2026.