Former Prime Minister Joseph Muscat today defended Malta’s hedging agreement, saying that Malta saved around €125 million.

Muscat said that if one compares what the country paid in the five years of the hedging agreement, with what would have been payed if the interconnector would have been used on its own, Malta would have incurred a much larger sum.

In a post on Facebook published on Wednesday, Muscat said that “at a time when we were switching from Heavy Fuel Oil to gas, the Nationalist Party was opposed to building a new Power Station, despite its environmental, health and economic benefits.”

“The PN said we didn’t need it since we would make do with the interconnector on its own,” Muscat said.

He added that the “economy in Malta has grown in recent years, to the extent that not only did we not need a new power station, but to the point that it had already reached its full capacity.”

In the Facebook post, Muscat wrote that it was once said that with the interconnector, Malta would be saving €20 million a year.

He argued that this this is an “incorrect figure” because the person who calculated this amount forgot to include and amortise the capital cost.

In addition, they then also said that with the hedging agreement, through which the Labour Party set a gas price with Azerbaijan for five years, Malta was losing money.

“As if the people concerned saying such things do not know the simple rule of hedging as an insurance to ensure price stability, and that the best time to make such an agreement is when prices are lower, rather than higher,” Muscat said.

He noted that Azerbaijan is now a country where the whole of Europe is “now queuing and knocking on its door.”

In recent months, Muscat said that such criticism against the energy mix policy (PVs, LNG and interconnector) has seemed to stop.

He added that “our decision to hedge in order to ensure stability, against the advice of those who had shattered the country with high bills, yielded the result as bill prices dropped to the extent that Malta has the lowest bills in Europe.”

In this way, it is easy to understand why some refrained from criticising Malta’s energy policy, Muscat said.