Excise duty on fuels is to rise by 3 cents per litre with immediate effect, Finance Minister Tonio Fenech announced in the Budget speech today.

He said that the increase was being made in the context of the polluter pays principle and in view of the investment being made in a cleaner and more efficient bus service.

He said that the use of biodiesel would, at the same time, be encouraged.

Mr Fenech said that next year, the government would invest €1 million for modifications to the Delimara power station boilers, to reduce their emissions. At the same time, investment would continue on the extension of the Delimara power station and on the inerconnector with the European grid.

He said that the €165m power station extension, due to be completed in 2012, would give particular attention to the environment, and its emissions would be continiously and publically monitored.

The internnector would mean that Malta would not be totally reliant on oil for its power supply.

It was also hoped that Smart Meters would be installed in all of Malta and Gozo by 2012. Some 32,000 have been installed so far and the rate of installation is getting faster.