The oil deal Malta and Libya struck this week would be implemented once the North African neighbour managed to increase its oil production, Prime Minister Joseph Muscat said yesterday.

The agreement, which provides for Malta to buy oil, fuel and gas at discounted rates, was signed on Monday during a visit by Libyan Prime Minister Ali Zeidan.

However, Libyan oil production is almost at a standstill due to blockades on its refineries and oil ports by workers and armed militias demanding regional autonomy.

Dr Muscat pointed out that both he and his counterpart had referred to the prevailing situation when the deal was announced, adding that the agreement was still a historic step forward that had to be considered within the context of the present situation in Libya.

He highlighted the fact that the Libyan government had kept the promise it made in July of coming forth with a memorandum of understanding in this area by the end of the year.

“What I can say for sure is that, by March of next year, the utility bills will decrease (as part of government-announced plans to convert Enemalta’s power stations to gas). This is something we have 100 per cent control over,” he said.

Asked about his position on the extension of an environmental permit that will allow Enemalta to keep using heavy fuel oil at Delimara, Dr Muscat insisted his government was still against the use of such fuel and was working on a project that would stop it.

Asked whether the plant could be run on diesel until it is converted to gas, the Prime Minister said that was not feasible.

“We originally had that idea some years ago but, after speaking to experts, it resulted it could not be done in that manner and, in fact, it was not part of our energy plan.”

The Nationalist Party referred to a statement made by the Labour Party in December 2011, in which it reiterated its pledge to start the process of converting the Delimara power station extension to gas as soon as it was elected to government, “with the first step being to have it run on gas oil”.“It is clear that the Prime Minister is tripping up in his own promises,” the Nationalist Party said yesterday.