Lighting a way through: electricity prices in Malta vs rest of Europe

Throughout the pandemic, Opposition spokespersons have frequently argued that Maltese families and businesses were suffering from extraordinarily high electricity prices. They argued that it was immoral that in a crisis, families and businesses were being made to bear this burden.

Recently, Eurostat published extensive statistics on the price of electricity in Europe. Surprisingly, instead of portraying Malta at the high end of utility bills, our country actually features on the exactly opposite end.

In the second half of 2020, electricity prices (including taxes) for households were the fourth lowest in the European Union and the second lowest in the Euro Area (EA). The “immorally high” prices in Malta are less than two-thirds the average price faced by EU households. German households, for instance, face an electricity price 2.5 times that of the average Maltese family. In its article, Eurostat points out that taxes imposed on electricity in Malta are the lowest in Europe, about eight times less than average.

While it has been claimed that abroad, elecricty prices were being slashed in 2020, the average electricity price in the EA in reality was 22.9c per kilowatt hours in 2019 and 22.7c per kilowatt hour in 2020. While there were a number of countries where prices fell, across the EU these were offset by countries where prices rose. In Luxembourg and Poland, households faced increases of 10%, while in Slovakia the increase was of 9%.

German households face an electricity price 2.5 times that of the average Maltese family.

The stable prices enjoyed by Maltese households during the pandemic contrast sharply with what had happened during the economic crisis of 2008. By 2009, Maltese households faced electricity prices that were a staggering 72% higher than a year earlier. The Government of the time had blamed the increase on international trends in oil prices. Interestingly, these “international” trends did not seem to have affected that much the rest of Europe, where electrity prices grew by 4%, or 18 times less than in Malta.

By contrast, between 2013 and 2020, while electricity prices for consumers rose by 5% across the EU, in Malta they fell by 22%. From being the country with the highest rise in prices between 2008 and 2013, Malta has registered the third-highest drop in prices across Europe since 2013. From having the thirteenth highest electricity bills in Europe for households, Malta now has the fourth lowest.

Electricity prices for businesses

Could it be that the “extraordinarily high” electricity prices are imposed on businesses? Well, a look at the official data in this regard does not yield any such evidence. Electricity prices for Maltese businesses are 12% lower than those for their counterparts on the continent. Maltese firms pay three-fifths the price faced by Danish firms. The prices faced by Maltese firms are 20% lower than those of neighbouring Italian firms, and 15% lower than those faced by Cypriot firms.

Electricity prices for Maltese businesses are 12% lower than those for their counterparts on the continent.

In 2020, on average, electricity prices for firms in the EU rose by 5%. The largest rise was observed in Poland, a whopping 30%, while Dutch firms endured a 15% hike, Irish businesses took on a rise of 12% and German operators had to handle a 10% rise. In Malta, businesses faced stable prices and some even could benefit from the scheme to receive a hefty refund for their consumption during the summer months.

So when did Maltese firms face “immoral” prices? Following the 2008 financial crisis, while European firms faced an 8% rise in electricity prices, Maltese firms were hit by a 23% surge. In the space of a year, Maltese electricity prices for firms went from being 10% cheaper than those faced by German firms to being 5% higher.

Between 2008 and 2013, electricity prices for Maltese firms rose by 47%, while for EU firms they rose by 25%, or by nearly half the Maltese rise. Between 2013 and 2020, prices for Maltese firms fell by 25%, the second-highest drop across the EU, while in the EU, firms experienced an increase of 3%. While in 2013 Maltese prices were more than a quarter higher than the average EU price, by 2020 they were 7% cheaper than the average EU price.

Eurostat data clearly confirms that energy policy since 2013 has delivered much better outcomes both for households and businesses in Malta, both compared with policy before 2013 but also compared to what was happening in the rest of Europe. Instead of worsening purchasing power and competitiveness, as they had done prior to 2013, electricity prices have contributed to make Malta’s economy more dynamic.

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Anton Cutajar
Anton Cutajar
3 years ago

It would make sense to publish a graph of the prices of electricity in Malta VS the european average since 2000. I am sure that all the data is readily available. Only then one would really know the comparison. On another issue – the computation of electricity bills, we cannot keep hearing rhetoric. We need to pick up 5 bills say, one who uses 8kWh daily, one who uses 12kWh daily, one who uses 15kWh daily and so on, and work out how would his annual bill be in 2010, 2013, 2015 and today. I am not so sure that working out the bills over an annual consumption, as the Nationalist Party seems to suggest would bring about lower bills for everyone. Certain people may have a rebate on two bills but evaluated over a year, may lose this rebate. We cannot keep hearing rhetoric – we have to work out concrete examples! and publish them!