The authorities started to hedge oil for 2011 at similar or slightly lower prices than Malta was paying for this year, Finance Minister Tonio Fenech said yesterday.
"It would be a dream to think oil prices will go down more," he said.
Giving details about the second year in government, Mr Fenech stressed the importance of efficiency in the distribution of electricity. Losses, he said, had already been cut drastically from a staggering 25 per cent in 1988 to 11 per cent last year.
Moreover, the introduction of smart metres over the next two years should further reduce electricity losses - especially from theft - by another five per cent, which should be reflected in a reduction of electricity bills.
He said an exercise was underway to improve work practices at Enemalta because salaries accounted for more than half its expenditure.
Mr Fenech said there were indications that economic activity should start recovering this year, with a growth of about one per cent expected, following a contraction of two per cent in 2009.
However, he was cautious not to give any projections, saying that Malta's economy was highly dependent on that of other countries, which could also bring opportunities if international companies decided to relocate to Malta. "We have shown a high level of stability when faced with a crisis and this puts us on the investment map," he said.
In fact, Mr Fenech said German bank Deutsche Bank had been granted a full banking licence by the Malta Financial Services Authority (see The Times Business). The bank already had an office in Malta and Mr Fenech described the new licence as "very good news".
He said 2010 could be "a very good year" for tourism, also helped by the base that low-cost airline Ryanair intended to set up in Malta. The previous year was a bad one due to an international recession that saw banks abroad collapse, governments facing financial crises and unemployment soaring.
However, he said, while Malta experienced an increase in unemployment, the economy still managed to generate new jobs, with over 7,200 people entering the workforce for the first time. Almost 5,000 of these were full timers.
Asked about the €39 million payment made to BWSC, the contractor that won the bid for the new Delimara power station, despite an investigation by the Auditor General into the deal, Mr Fenech said: "The process was carried out properly through the Department of Contracts and the regulations were followed. The contract was signed before the investigation started."
Moreover, he insisted that unless Malta had a new power station by 2011, the consequences could be serious with parts of the islands ending up without electricity because the Marsa plant had to be closed.
"We cannot take these things lightly and simply wait. If there was any foul play, people will have to answer for it but the country cannot remain without electricity in the meantime."
He said keeping Marsa open would breach EU regulations and incur penalties for Malta. Moreover, the country was using about €500,000 more fuel every week, meaning an additional €23 million every year that had to be paid by people.
Pointing out that cancelling the contract with BWSC could cost the country €300 million, Mr Fenech said there were penalties on both ends if the parties did not abide by the contract.