For the first time in history, the price of diesel in Malta is the cheapest to be found throughout the European Union. This has happened as even Bulgaria, the country that previously had the lowest prices, registered large increases week by week.
At the beginning of the year the price in Malta was €1.21, whereas in Bulgaria it was 90c. But while Malta is the only country in Europe where the price of diesel has remained stable, in Bulgaria the price rose by 31c, in line with the average rise in the price of diesel across the EU.
If this increase had happened in Malta, a person who had previously spent €20 on diesel every week, would now be spending €25. In one year, this rise would have eaten up an additional €260 of their income. This is equivalent to three months’ worth of their previous diesel spending.
This is not a simple theoretical exercise. This is exactly what had happened in 2008 when Malta was experiencing a much smaller economic challenge than the pandemic. That year, the price of diesel in Malta had started at €1.02. By November it had risen to €1.23, 21c more. Whoever used to spend €20 on diesel every week that year ended up spending €24 and ended out of pocket by well over €200.
The Conservative government back then did not cut fuel taxes so that the price for consumers remains stable despite rising international prices. In fact, apart from a steep rise in fuel prices, consumers also faced an increase of fuel tax by 13c between March 2008 and March 2013. This amounted to almost a third of the increase in the price of fuel in our country that occurred during that time. It explains why the price increase in Malta was twice that observed in the rest of the EU in the same period.
During the same years, Malta’s inflation rate was more than double what it is today.