Diesel car owners in Malta have been paying an average of 6c more per litre of fuel when compared to EU prices since the start of 2015, according to calculations carried out by The Sunday Times of Malta.

In the same period the average price of petrol was 2c below the EU mean.

This exercise was carried out ahead of the next government revision of fuel prices which is scheduled for the end of this month.

Though the Energy Ministry has already indicated that prices will be going down, this announcement has not halted criticism of the government’s hedging policy introduced in 2013.

Contrary to the rest of Europe, pump prices in Malta do not fluctuate on a weekly basis but are revised every three months. This policy had been justified as part of an effort to bring more stability to fuel prices.

However, the slump in international oil prices attracted criticism that local pump prices were not reflecting this sharp drop. Since June 2014 oil prices have dropped by 70 per cent, reaching as low as $28 dollar a barrel.

*Source: European Commission weekly oil bulletin between January 2015 and March 2016

An analysis of the weekly oil bulletin issued by the European Commission shows that since the end of last September the prices of both petrol and diesel in Malta were consistently above the EU average. At the end of last month the gap was quite pronounced with the price of petrol and diesel being 11c and 17c above the EU average respectively. Since then the disparity has been gradually decreasing.

While this trend has not yet eroded the gains made by motorists between March and September last year – when the cost in Malta was lower than the EU average by up to 15c per litre – the situation for diesel vehicle owners is bleaker. In this respect the government’s hedging policy has not paid dividends bar for a few months between March and July last year when it slid below the EU mean, but only by a modest margin which never exceeded 6c per litre.

The price hikes have been accentuated by the fact that when excluding taxes and duties, Malta already has the highest prices in Europe by some distance due to its economies of scale and importation expenses.

In this respect the government’s decision in the last two Budgets to increase excise duty on petrol and diesel came under heavy fire.

Meanwhile oil prices last Friday dropped by three per cent after Iran put off plans to freeze production levels.