Utility rates will go down, Gonzi says

Water and electricity rates will eventually be reduced once the government starts buying refined oil at prices that reflect the plummeting value of crude, Prime Minister Lawrence Gonzi said yesterday.

Speaking at a political activity in Balzan, Dr Gonzi defended the new utility tariffs system, which he said created a strong incentive to reduce waste and use alternative energy.

He said it took a while for the price of refined oil to go down in the wake of crude but promised that as had already happened with the price of fuel, water and electricity prices will also be reduced at some point.

On past government declarations, the move is to be expected. A few months ago Infrastructure Minister Austin Gatt had stated that, because of hedging agreements, the cost of generating energy would start going down only when crude oil fell below $85 dollars a barrel - it is now hovering at about $46.

Dr Gatt later promised that the new tariffs would be revised when international oil prices varied by more than 15 per cent, a pledge he has been hammered on by the opposition in the continuing absence of such a revision.

Yesterday was the first time that Dr Gonzi, who is mired in controversy with several unions over the workings of the new tariffs, has made a concrete commitment that they will come down. Still, he did not give any indication of when to expect such a change. He praised Malta for remaining competitive and strong despite the global economic slowdown that was crushing big economies, sending them into a recession and leading to many job losses.

"Malta is no exception, and will also be affected by the financial crisis," he said, "but we have managed to face the challenges through prudent decision-making and investment."

He said Malta is one of nine EU countries which will actually see a growth in their economy this year, rather than a recession, according to the predictions of the European Commission. He said this was a time that required tough decision-making and maturity, and yet, the opposition was coming up with every initiative to distract people's attention, adding that Malta will soon celebrate its fifth anniversary of EU membership, no thanks to the Labour Party.

Foreign Affairs Minister Tonio Borg, who also addressed the activity, said that, besides the €855 million that Malta has managed to secure from the EU's budgets, the real figure of assistance adds up to around €1 billion if one includes the funding of projects related to education, illegal immigration and refugees.