Nearly 90 per cent of households will see their water and electricity bills go up from next month, with increases ranging from a minimal €8 for three-person households to €175 for families of five or more.

The bills will go up by these amounts over what families are paying now despite the one-time government compensation, amounting to €10 million, an-nounced in the Budget.

But according to the authorities, reducing one's consumption by up to 15 per cent would be enough to bring the costs down to current levels.

On the other hand "vulnerable" households of three people or more will see their bills go down by between €18.92 and €29.91 over current rates and by up to €93.88 less than they were paying between October 2008 and last April.

The new tariffs are expected to be valid for the whole of next year due to a mechanism that will keep the price of purchased fuel at the same level throughout 2010, the government said in a statement issued last night.

The government said there was no increase in meter charges and the residential bills would be of equivalent amounts to those established in October 2008, which had caused uproar in the country.

The following April, in line with falling oil prices, tariffs were cut by 22 per cent for households and by up to 26 per cent for commercial and industrial consumers.

But a subsequent increase in fuel prices caused Enemalta to lose €21.4 million since then, the government said. It is expected that next year Enemalta will spend €35.5 million more to buy the same amount of oil that it bought this year.

The government said it would be subsidising families to the tune of €41 million for water and electricity and for a new drainage charge, and was introducing lower night tariffs for industry, hotels and others who work at night.

The new tariffs will come into force on January 1 after being given the green light by the Malta Resources Authority.

In November Enemalta and the Water Services Corporation filed a request with the MRA for an increase in tariffs effective as from the new year to make good for increased operating costs.

The tariffs were left unannounced pending the approval of the authority, a decision that led to criticism by the employers and unions who believed that it only served to cause uncertainty during a time when the country was already suffering the repercussions of the recession. They also believed this delay would spoil the festive season.

Yesterday, the government said there was a disagreement between Enemalta and the authority over regulatory principles but Enemalta decided to reduce its predicted income for next year by €7.29 million and was considering the possibility of appeal.

The Water Services Corporation has also asked for a revision in water tariffs because of the impact of electricity prices on its operations. The corporation is expected to see its electricity costs increase by €6.47 million next year.

It has also introduced a €20 sewage tariff, although this will not impact consumers since it subsidising this new charge from the subsidy it uses to cover the current water service tariffs.

The government has set aside €10 million for one-time energy compensation to families, over and above the €7 million in energy benefits to some 28,000 households.

"This means that 97 per cent of households will not pay more for their electricity, or have a minimal increase," the government said, referring to the difference between the bills based on the October 2008 rates.

The government said the new Day And Night Tariff for commercial entities should incentivise those who work at night by offering better rates. The tariff is only for non-residential bills which use a certain number of units but can be extended with the introduction of smart meters.

Last night the Labour Party described the new rates as Prime Minister Lawrence Gonzi's Christmas present to families and businesses. It said the new tariffs would bring many families to their knees and would shock the economy and endanger jobs.

It estimated that electricity tariffs would rise by 20 per cent, back up to October 2008 levels, while water tariffs were much higher than in October, an announcement made just 10 days before Christmas and at a time when oil prices were going down.

It also pointed out that the government had formalised the introduction of a new sewage tax although it was subsidising it for the time being.