Updated | Opposition’s ‘technically incorrect arguments' on fuel prices – government

Maltese families are paying substantially high prices for fuel despite oil prices being at the lowest levels since 2008, the opposition said.

The PN said that fuel prices “must be revised downwards” to reflect the global price of oil.

Until this summer, the global oil price had been relatively stable for almost four years, at about $110 a barrel.

However, weaker demand coupled with surging US production has seen the price of the benchmark Brent crude oil price drop by 30% since June to around $83 a barrel.

In a statement issued today, the PN said that in May, just before the European elections “Prime Minister Joseph Muscat boasted that petrol prices went down by 2c at a time when oil was at $100 a barrel. At the same time, Muscat fixed the price for the rest of the year.”

The opposition added that despite the drastic reduction since May, families were still paying high prices for petrol and diesel.

In contrast, the statement said that in September 2010, when the PN was in government and the global oil price was at a similar level, diesel cost 30c less and petrol was 24c cheaper.

Government's reaction

In a reaction, the Ministry for the Energy said the Opposition’s arguments were incorrect and accused the previous Nationalist administration of having always allowed the international market to dictate prices for consumers, changing every month.

The ministry said the Opposition was “technically incorrect”, basing its arguments on the price of fuel at one particular point and ignoring cheaper prices established in the past months.

“The Opposition is mistaken in also ignoring that previous PN administrations had increased tax on fuel. It is incorrectly comparing the $78 a barrel of crude oil, which is not the case at the moment. It is also ignoring the exchange rate,” it said.

The ministry pointed out that households and businesses were witnesses themselves of the benefits of price stability which is resulting in more money at the end of the month as well as proper planning.

This stability, it added, will continue thanks to a number of measures to be announced in Budget 2015.

“Price stability and cheaper utility tariffs have provided businesses and households with confidence and trust, leading to the biggest economic growth among Eurozone countries,” the government said.

It argued that, on average, the negotiated price of fuel offered stability and was consistently cheaper than international market prices.

“The difference was felt to a point that Malta registered a lower inflation rate compared to previous years,” the government added.

It insisted that consumers had been forced by previous administrations to pay more than today. “All figures confirm that the government’s work in this sector provided stability of fuel prices and less expenses for consumers.”