One year of lower-than-average fuel prices

This week marks one year since fuel prices in Malta have been below the average across the euro area.

Whereas in Malta the price of petrol and diesel have remained stable, in the euro area there has been a consistent increase.

At one point it cost the average European motorist 36c per litre more than a Maltese motorist to fuel their car.

In many European countries the gap in fuel prices is even starker. For instance, in the Netherlands a litre of petrol costs €1.98c or a whopping 64c more than in Malta. Similarly in Sweden a litre of diesel costs €1.97c or 76c more than locally.

Consider a family with two cars, one running on petrol and the second on diesel, that started 2021 spending a combined €50 on fuel. This week, this family in Malta, if they consumed the same litres of petrol and diesel as a year ago would still be spending €50 on fuel. The same family in the Euro area would be spending nearly €62 while consuming the same amount of petrol and diesel.

Across the last 52 weeks, the European family will have spent €366 more on fuel, €7 more per week than a Maltese family for whom petrol and diesel prices were kept stable.   

When in mid-2012 the price of oil in euro was similar to the current level, the Nationalist administration was allowing a petrol price of €1.50c, 16c more than is being charged now. The price of diesel was €1.40c, 19c more. At that time, the administration used changes in international prices as an excuse to increase the price of fuel.

In 5 years, the price of petrol was increased by 39c, equivalent to 36%. In the same period across the euro area, the increase had been of 28c or by 21%. As for diesel, it rose by 36c, equivalent to 35%, while across the euro area the rise was of just 20c, or 17%.

The factor behind this staggering rise in prices was the stealthily increase in taxes on fuel by 13c. Contrast this with this administration’s decision to cut taxes on fuel to the lowest amount allowed by European Commission rules so that families and businesses could have stable prices.

The investment that this administration is making to lower burdens is the main reason why the Maltese economy has been so resilient during the pandemic. Instead of facing years of higher unemployment, as it had done after the 2008 recession, the Maltese economy is currently experiencing the lowest unemployment ever recorded.

Malta’s inflation rate is the lowest in the EU, making Maltese consumers better off than those on the continent. The hundreds of euro that families are saving on fuel and on other essentials such as electricity are instead fuelling our strong economic recovery.

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