Petrol prices will drop by 2c in July and will be locked until the end of the year after Enemalta negotiated long-term hedging agreements.
The price of diesel will not fall but will remain the same until December, in a move Prime Minister Joseph Muscat said would bring certainty to the economy.
Bottled gas – liquefied petroleum gas – will drop by €1.30 and remain stable until September.
The petrol price cut partially reverses the increase of 3c per litre since the beginning of the year. Last month, fuel prices were fixed until June.
The revisions were the “good news”, Dr Muscat cryptically mentioned over the past few days.
He made the announcement at Auberge de Castille, in Valletta, flanked by Energy Minister Konrad Mizzi. Under the new long-term arrangements, petrol will cost €1.44 per litre, diesel €1.36 per litre and a 12kg LPG cylinder – normally used in households – will be priced at €17.10.
The price was later confirmed by dominant operator Liquigas.
Dr Muscat said the agreements did not involve any country-to-country deals but showed how long negotiations could lead to stability that businesses and families craved.
“In the past, we had an administration that insisted nothing could be done, blaming frequent fuel price adjustments on fluctuations in international markets,” Dr Muscat said, adding families and firms could now budget for a longer period.
The price of diesel had been stable for the past 15 months and was the lowest in more than two years, he added.
Dr Muscat said the decision meant Malta was the only country in Europe with stable fuel prices up to the end of this year.
In the past, we had an administration that insisted nothing could be done
Asked about the risk of Malta ending up paying prices that were higher than those abroad if oil prices dropped, Dr Muscat said such a prospect was unlikely in the current international climate.
Dr Mizzi explained Enemalta had been talking to financial institutions since December to secure the best deal by hedging fuel prices and currency exchange rates.
The agreement over LPG gas was brokered after talks between the Malta Resources Authority and private firm Liquigas.
Dr Mizzi said no subsidies were involved in the gas deal.
The price of bottled gas shot up after the gas sector was privatised in 2008 and the government removed subsidies.
From €5.40 in March 2008, the cost of a 12kg cylinder rose to €20.60 in December 2012.
When asked whether yesterday’s announcement was a strategy to boost the Labour Party’s prospects in the European Parliament election, Dr Muscat said fuel price stability was always a concern for the government.
“We had gone for three-month agreements but felt this was not enough,” he said, reiterating Labour was still an underdog in the election.
Reacting, the PN accused the government of harking back to the time when the price of canned tuna was set by the State.
“The good news that Muscat announced with so much pomp after a week of teasing people and the media about it was a marginal reduction in the price of fuel.”
The petrol price had only been cut by the same margin it had gone up earlier in the year. And the price of diesel would not benefit the commercial community, the PN said.
Labour said the PN did not understand the damage it used to cause to businesses and families when prices rose every month.
ksansone@timesofmalta.com