The latest increase in the price of fuel will decrease consumption and affect the country’s competitiveness, Labour Party deputy leader Charles Mangion said yesterday.

Dr Mangion told a press conference that the government should have anticipated this increase because it knew that a problem existed. The result, he said, was that the consumer had to pay.

He said the government should study the possibility of a hedging agreement with Libya because the country would save a lot of money. Dr Mangion asked what the consultative committee on fuel prices was doing now that the price of fuel had reached record levels.

Between 2001 and 2005, leaded petrol increased by 10c a litre, unleaded petrol by 7c, diesel increased by 22c a litre while the price of kerosene had shot up by 25c a litre in a year – an increase of 150 per cent.

He said light fuel oil increased by 5c9 a litre in a year – an increase of over 33 per cent.

Dr Mangion said that it was not true that the economy was growing because there were only two sectors that were showing signs of growth – the banking and property sectors.

He said an increase of Lm17.5 million in investment was only due to increased capital spending by the government.

Labour’s deputy leader said investment was down by Lm7 million in the first six months of this year while exports were also down by 8.7 per cent.

Consumption was down by 4.6 per cent while the tax percentage of GDP was up from 32 per cent to 39 per cent.

Dr Mangion said the government should have consulted with industry and economic operators before increasing the price of fuel.

In its consultation meetings before the Budget, the government should come up with remedial actions to soften the impact of these hefty increase in the price of fuel ... increases that were making life ever more difficult for Maltese families and decreasing the country’s competitiveness levels.

In a statement, the Investments and IT ministry said the Labour Party had attributed the price hike to domestic issues but made no reference to the international situation.

“The Labour Party’s argument that the local price of fuel went up because there is no hedging agreement in place is pathetic and incorrect,” the ministry said.

Referring to comments made by a number of constituted bodies that the price hike was affecting the country’s competitiveness, the ministry said this was not the case.