(Adds PN statement)

The price of oil is at its lowest since 2009 but motorists in Malta still pay through the nose when filling up, especially for diesel, which is the fourth most expensive in the 28 EU member states.

Faced by increasing pressure on the matter, including by the Opposition, the government last October announced that, from January 1, the price of petrol would go down by 3c to €1.32 per litre, whereas diesel would be 4c cheaper, at €1.22 per litre.

While this will put the cost of petrol for the consumer 2c below the current EU average, diesel vehicle owners would still be paying 4c more than the mean pump prices across the rest of Europe.

The price of Brent Crude on Monday fell 5.3 per cent to $40.73 a barrel, almost a third of what it cost in August last year when it sold at $115.

The latest slump was triggered by the decision of Opec (a group of the largest oil producing countries that account for almost a third of the worldwide supply) against cutting production. The move was the latest attempt to kill off the threat from the US shale industry, which sent crude prices to their lowest levels since the 2009 global recession.

The decline, which has been going on for months, has put Malta’s decision to opt for long-term hedging under the spotlight, with critics saying such a “gamble” was badly backfiring.

The government has insisted all along that the strategy was paying dividends as its intention was to stabilise fuel at the pumps contrary to the policy adopted by the PN government whereby prices used to fluctuate on a monthly basis.

According to the latest data published by the European Commission, the prices of diesel in Malta, currently €1.26 per litre, is 8c higher than the EU average. This makes the price of diesel here the fourth costliest in the EU. Prices vary between €1.56 in the UK to 97c in Luxembourg.

As for petrol, Malta stands above the EU average of €1.34 per litre, which is 1c lower than the price at local pumps. The petrol price in Malta is the 10th highest in the EU, with the UK again topping the list with €1.52 per litre. Bulgaria and Poland are at the lowest end of the scale, retailing petrol for €1.02 a litre.

The downward trend in oil prices could continue next year, dropping to even $20 per barrel. “If the current economic landscape persists, it would be extremely remote for this trend to be reversed,” an experienced fuel trader told the Times of Malta.

As for the government’s insistence to stick to its hedging policy, he pointed out that Malta’s scenario was quite unique, noting that the fuel sector liberalisation had only happened “on paper”.

“The government’s justification of its hedging policy to keep stability in prices only makes sense in Malta because it has no real competitor at the pumps,” he added.

Highest EU pump prices

Lowest EU pump prices

Source: European Commission weekly oil bulletin as at November 30.

PN APPEALS TO GOVERNMENT TO IMMEDIATELY LOWER PRICES

In a statement this afternoon, the Nationalist Party appealed to the government to immediately lower prices.

Shadow Minister Marthese Portelli said the price of diesel in Malta was the fourth highest among EU countries while that of petrol was the 10th highest. Both prices were higher than the EU average.

The price of diesel was cheapest in Luxembourg where it cost 97c per litre and that of petrol was cheapest in Bulgaria and Poland where it was €1.02 per litre. In Malta, diesel cost €1.26 per litre, petrol €1.35.

The PN said that while families and businesses in Malta were paying among the highest prices for fuel in Europe, the Prime Minister was making €7,000 a year for renting his car to himself.