Watch: ‘We Won’t Tighten Our Belts’: Robert Abela Dismisses Call To Phase Out Fuel Subsidies
Gasoline and diesel prices in Malta will remain relatively cheap in the near future after Prime Minister Robert Abela confirmed he has no intention of reversing the government’s policy of heavily subsiding fuel.
“We definitely won’t resort to austerity policies as our predecessors had done back in 2008, when unemployment and inflation shot up and Malta spent years struggling to recover because of mistaken strategic decisions,” Abela said on ONE TV yesterday.
“Were we to return to that austerity formula, we will witness a replica of those results, only worse because the current pressures are way greater. We consistently stood by a progressive economic policy that keeps the economy growing at a string rhythm.”
“We know what result austerity and belt-tightening will bring. It will lead to the economy shrinking and more unemployment… we definitely won’t go in that direction.”
Subsidies mean Maltese drivers are currently benefitting from some of the cheapest gasoline and diesel prices in Europe, which is in the midst of an energy crisis triggered by the war in Ukraine.
Recent data shows that diesel in Malta currently costs €1.20 a litre, compared to €1.88 in Italy, €1.78 in France, €2.16 in Germany and €2.12 in the UK.
Gasoline costs €1.34 per litre in Malta, compared to €1.82 in Italy, €1.54 in France, €1.99 in Germany, and €1.96 in the UK.
However, the Chamber of Commerce – one of the country’s most powerful business lobby groups – recently called for this subsidy to be gradually phased out so as to encourage people to switch to alternative modes of transport.
Besides the phasing out of subsidies, the Chamber also called for the introduction of parking fees in urban areas, the revision of car license fees such that people pay according to how much they use their vehicle, and the establishment of an “e-mobility wallet” that will refund people for using alternative means of transport.
However, Abela warned that phasing out subsidies risks destabilising the economy.
“Now isn’t the time for the government to take decisions that might create economy instability. If the argument is that measures must be sustainable, my response is that every decision taken since the start of the COVID-19 pandemic has revolved around this very principle.”
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