International oil prices beyond government's control - Gonzi

In a recorded radio interview with journalist Mark Azzopardi on party station Radio 101, Gonzi said that the Labour party is making “a strategic mistake in giving the impression that increased prices of commodities are a result of government decisions.”

“We buy oil from international markets, and we have no choice but to buy it if we want electricity,” Gonzi said. “Government took a decision in order to not remain susceptible to unstable oil prices, given that Malta and Cyprus are the only EU countries that depend on other countries for oil.”

Government’s decision was to buy enough oil for 2010 in advance as well as for 2011. “This way, we can buy a supply of oil for a few months at a good price. We’ve already done this for 2011, when the price was $80 a barrel- now it’s around $100 a barrel.”

“Another solution government is looking towards is an interconnected cable between Malta and Sicily for oil supply. We released a tender for this and will follow it up in due time,” the Prime Minister said.

Asked whether it would be better to revert to subsidies in difficult times with such high commodity prices, Gonzi said “We could do that if we want to end up in the same situation as Greece, or the UK which increased VAT, or Cyprus which increased VAT on food.”

“We will continue to give energy benefits to families who really need to soften the blow of the effects of energy prices on their quality of life, but otherwise we must keep our feet on the ground.”

Gonzi went on the mention the planned protest by the Labour party on increased fuel and gas prices. “This is a democratic country and people have the right to exercise their freedom of expression, but I believe that the move is a step backward rather than forward.”

He continued by appealing to the Opposition to “work together and find solutions together, but let us not hide important decisions from the public which concern them.”

The frequently debated increase in the pay of ministers was raised, where Gonzi defended that the “public deserves clear answers on this”

“The increase in ministers’ pays was agreed two years ago, so it is wrong that people believe it has surfaced now.”

“I took the decision around the same time that I decided to have a smaller cabinet. When John Dalli left for EU commissioner, I did not replace his position,” Gonzi said.

“Since the beginning of this legislature, we’ve saved almost €2.5 million every year in ministers’ wages, and are spending €1.5 million on honoraria, therefore there is €1 million in reserves.”

Gonzi talked about the reduction of unemployment and the increase of full-time workers, which are “good indicators” for the Maltese economy.

“We had a record in tourism this year, which means more jobs in hotels and restaurants,  as well as the highest increase in retail trade in EU. The average salary in Malta also increased from €13,800 a year in 2009 to an average of €14,466 in 2010.”

With a noticeable drop in unemployment, Gonzi said “I prefer investing millions to bring work and attract investment in this country, then giving subsidies, which is a waste, just to make a few people happy at the cost of the country at large.”