The Malta Independent 17 May 2022, Tuesday

‘Necessary steps taken to ensure price stability and low energy tariffs,’ Energy Ministry says

Kevin Schembri Orland Thursday, 27 January 2022, 09:31 Last update: about 5 months ago

Necessary steps were taken by the relevant entities to ensure price stability and low energy tariffs, the Energy Ministry told The Malta Independent in response to questions relating to energy prices.

During a Public Accounts Committee meeting earlier this month, Independent MP Konrad Mizzi said that the fixed-price agreement with Electrogas will come to an end this year, and that the next phase, unless Enemalta has made other arrangements which he would not know about as he is no longer energy minister, would be for an indexed price based on the Brent index.

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The report by the National Audit Office regarding the Electrogas agreements reads that "during the Fixed Price Period and the Indexed Price Period, the price for the annual contract quantity of LNG was €9.40 per mmBTU and 14% Brent per mmBTU, respectively."

In his budget speech, Finance Minister Clyde Caruana had said: "Energy prices and, on a broader scale, inflation in general could well be next year's (2022's) challenges. In light of this, the deficit forecast may be revised by 1.4% to reach 7% in the event that Government decides to reduce the impact, from the financial aspect, on families and business."

Malta currently makes use of an energy mix, taking energy from Electrogas as well as the interconnector among other things.

This newsroom sent questions to the Energy Ministry, asking for the exact month the first phase of the price agreement (the fixed price) with Electrogas will come to an end. The ministry was also asked to confirm whether phase 2 of the agreement, regarding basing the price off the Brent index will be initiated or if it will go for some other fixed-price agreement, and for an explanation as to how that will work. Lastly, the ministry was asked whether the country can expect energy tariffs to rise this year or next year and, if not, how the government will ensure that such prices will not rise and if the government would need to increase payments to Electrogas from its coffers.

 "The Government's energy policy is very clear: stability and acting to keep electricity prices down. This policy is clear and consistent as shown in previous months when energy and gas prices skyrocketed internationally, directly impacting electricity costs across Europe. Some countries have experienced an increase of 166% in comparison to pre-pandemic electricity bills, whereas in Malta prices remained stable," an Energy Ministry spokesperson said.

"Our strategy of diversification and affordability means that the Government is focused on protecting consumers and working to ensure affordable bills for everyone. The same cannot be said about the Opposition with its leader Bernard Grech stating publicly that when prices go up internationally, they go up for everyone," the spokesperson said, taking aim at the PN.

"According to the LNG supply agreements, the Government does not, nor will it need to, issue any payments to Electrogas. We are working hard to provide this country with clean, efficient, and affordable energy. That's why we are working on the short-term, medium, and long-term. Thinking long-term, we are working hard to move from LNG to cleaner energy sources. Whilst LNG provided us with the right transition from Heavy Fuel Oil, which was both more polluting and more costly, now is the time to make the next important leap by increasing our share of renewables and keeping alive the opportunity for a state-owned hydrogen-ready pipeline. This strategy would give citizens better air quality, a clean source of energy, and peace of mind in energy prices. Unfortunately, even in this case, the Leader of the Opposition chose to place the national interest on the backburner and when in Strasbourg last week, he chose not to defend, let alone promote, Malta's vision of having a hydrogen ready pipeline."

This newsroom pressed for clearer answers to some of the aforementioned questions.

The spokesperson said that the current phase of the agreement ends in April.

"As it was already very clearly explained, this government is the only guarantee to price stability and low energy tariffs. Therefore, relevant entities took the necessary steps to ensure price stability and low energy tariffs," the spokesperson said.

"Medium and long-term solutions that we are committed to as government will also help ensure we keep the lowest tariffs as we have managed to do so far despite the international scenario."

"This is very different from what the Nationalist party did while in government and from what the nationalist leader would do, as his post budget declarations have clearly shown that he still adopts the same pre-2013 principle of shifting pressures on the consumer. Our policy remains different from that of the opposition, and we want to keep helping businesses and families."

 

 

 

 

 

 

 

 


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