Utilities to cost families €4m more

Malta's families will be forking out an additional €4 million for their water and electricity next year after a €14 million overall rise in their bills is countered by €10 million in government compensation.

The €14 million figure was revealed by Finance Minister Tonio Fenech yesterday, just over a week after the government announced that households and commercial consumers would be paying higher water and electricity rates from January 1.

Despite the hike having been announced, the new tariffs have not yet been published, pending review by the Malta Resources Authority.

However, Mr Fenech yesterday let slip the government's overall estimate for families - perhaps the most politically sensitive group - when he argued that the government was making good for the impact of this rise through the €10 million one-time compensation announced in the Budget.

Roughly divided among the 148,000-odd households, the €14 million increase would mean that in 2010 each household would be paying an average of €95 more than they did this year.

However, this would be slashed to €27 over a 12-month period when taking the compensation into consideration.

Speaking at the Nationalist Party general council, Mr Fenech said "every spare euro should be given to families" to counter the impact of the tariffs, adding that the compensation fund would be spread among 97 per cent of families.

"We could have helped fewer families, and given more to those most in need, which would have been closer to our values," he said, in reference to criticism by Nationalist MP Jean Pierre Farrugia, who on Friday questioned the suitability of the one-off energy allowance for families with children insisting that €130 for a family of four was not enough.

Earlier Investments Minister Austin Gatt said this year the government was paying €34 million in subsidies for the tariffs, and this would have to be increased because the price of oil was going up.

Dr Gatt said for tariffs not to go up the government would have needed to use more tax money for subsidies. "To date nobody from the Labour Party has said how much tax money should be used to subsidise water and electricity consumption."

New higher tariffs were introduced in October last year and caused uproar in the country. They were cut by 22 per cent for households and by up to 26 per cent for commercial and industrial consumers in April.

But yesterday, Prime Minister Lawrence Gonzi said the tariffs would be revised to the same levels they were around a year ago. Oil prices reached a high of $147.27 per barrel in July 2008.

Last May Dr Gatt admitted that the increases in the utility rates should have been introduced from January.

Yesterday, the Labour Party criticised Dr Gonzi for creating uncertainty by not putting figures on the new tariffs. It said that although oil prices this year had reached a low of $40 per barrel, the government was saying that the tariffs would be the same as last year.