OPM justifies decision not to reduce energy rates, says tariffs already low
The government yesterday justified its decision not to lower energy rates in the budget for 2017, saying that the tariffs paid are already among the lowest in Europe.
Four days after constituted bodies lashed out at the government and complained that the energy rate cuts they were expecting were not delivered, the government issued a statement yesterday evening to explain its position.
Initially, Prime Minister Joseph Muscat had said that it was only the Opposition leader who was expecting energy rate cuts, but one after the other employers’ associations lambasted the government for not lowering the tariffs.
In its statement yesterday, the government said that in April of last year, electricity prices for businesses were reduced by 25%, which resulted in an annual €50m injection in the economy. Standard and Poor’s also confirmed that, as a result of the transformation of the energy sector, electricity tariffs are now well within the EU average.
Eurostat statistics, the government said, also demonstrate Malta’s standing in this respect. Around 90% of businesses in Malta use less than 20 Megawatt Hours. In this band of electricity consumption by SMEs, the rate per kilowatt hour in Malta is 12% cheaper than the EU average. In 2012, rates in this band were 13% more expensive than the EU average.
10% of Maltese firms consume between 20 and 500 Megawatt Hours. In this category of larger companies, the rate per kilowatt hour in Malta is 7% cheaper than the EU average. In 2012, rates in this band were 24% more expensive than the EU average.
The Eurostat data also shows that the prices paid by the very large consumers (0.5% of Maltese companies) with usage of between 500 and 2000 Megawatt Hours are within the EU average.
It is noted that, as happens in Malta, it is normal that domestic consumers pay less for energy than business consumers in other EU countries. In Malta, domestic rates were reduced earlier in April 2014.
The reduction in electricity prices in Malta were also complemented with an €80m distribution investment plan which resulted in an 80% reduction in power outages when compared to 2012. The levels of outages in Malta is no longer similar to those in many Eastern European countries but now compares well with Austria, France and the United Kingdom.