(Adds MLP reaction)

Malta has the cheapest diesel and electricity in Europe despite its dependence on oil, Infrastructure Minister Austin Gatt told a press conference this afternoon.

Reacting to MLP and GRTU calls for the government to reduce duty on diesel imports, Dr Gatt pointed out at a press conference that the EU had set a minimum excise duty of 0.33 percent for 2009. That is the level at which Malta is already charging duty. Only Bulgaria charges less.

Furthermore, according to current VAT rules, the VAT on diesel cannot be different from other fuels.

Dr Gatt said that when everything was considered, diesel in Malta is the cheapest in Europe. Therefore, the argument that one should reduce diesel prices to maintain competitiveness did not hold water.

Turning to the cost of electricity, Dr Gatt pointed out that only 45 of 980 industrial concerns in Malta had invested in a Power Correction System, which paid itself within a short time through power savings.

He pointed out that according to the latest Eurostat figures, issued in December, 45 per cent of domestic users, who consume up to 2,500kwh of electricity, have the lowest bills in Europe. Those who use between 2,501kwh and 5000kwh receive bills which are the fourth lowest in Europe.

As for industrial concerns, 31 percent receive the sixth cheapest bills and 53 percent receive bills which match the EU average.

Turning to oil purchases and hedging, Dr Gatt said he was renewing an invitation he had made to Labour MP Joe Mizzi for the Labour Party to inspect the Enemalta accounts.

The Labour Party in a reaction to Dr Gatt’s comments said that the minister should came factored in salaries in Malta when he claimed that fuel and power prices here are the lowest in the EU.

The disposable income of the Maltese was 77 percent of the EU average, according to Eurostat figures, the MLP said.

EU studies also showed that the Maltese people spent the most in the EU on transport, and the impact of higher fuel prices was therefore heavy.

Furthermore, the minister’s own figures showed that five EU countries charged a lower rate of VAT on diesel than Malta. And the minimum level of excise duty which could be charged would not be introduced in the EU before late next year.

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