The latest fuel price hikes, which became effective yesterday, will push up inflation and cut into people's pockets, according to the General Workers' Union and the Chamber of Small and Medium Enterprises - GRTU.

The GRTU said it had written to organisations representing transport services to meet to see about taking collective action. GRTU director general Vince Farrugia said that over the past weeks, the chamber had been lobbying the government over the already high cost of fuel. The chamber was prepared to lead other organisations should they decide to take further action.

"We had been lobbying hard for the government to seek methods to mitigate fuel costs, which were having a direct impact on inflation. The least we expected was a meeting to discuss the situation before the new prices were announced," Mr Farrugia said.

Once again, Mr Farrugia called on the government to cut duty on fuel, saying there are eight EU countries that charge less tax than Malta does.

Such prices affected the economy badly because everyone was hit, particularly the transport and distribution sectors, not to mention manufacturing, he said.

On its part, the General Workers' Union said the government should have held consultation meetings before implementing the drastic increases which badly affect the people's purchasing power.

The union said the fact that the government had taken such a decision on its own was another example of how the administration was ignoring social dialogue. Despite meeting the social partners on May 23, asking them for proposals on how Malta could remain competitive in the face of rising prices, the government simply decided on its own, without consulting anyone.

The union warned that the increases would continue to pile pressure on prices adding that the situation would get worse once the new electricity surcharge is announced.