Malta’s central banker, Edward Scicluna has come out with a bullish position on the European economy citing reports that the gas situation in Europe has been resolved not just for this Winter alone, but most probably also for the Winter after.
Negative predictions on the European economy were previously made on the assumption that gas prices will remain high and supply-flow replacing Russian gas will be small. Back at the start of September I went short natural gas, a trade which has worked perfectly as predicted. The predictions that Europe was in for a recession caused by a gas crisis were perpetuated mainly by Russian propaganda, but the EU along with national European governments successfully replaced Russian gas inflows beating back the exorbitant prices. Gas storage in Europe is currently at a nearly all-time high.
Malta has lost millions of Euros buying gas on a long-term and unhedged contract instead of taking the opportunity to buy gas in lots for shorter time-frames so as to avail from the opportunity to buy gas cheaply when the price goes down. The rational behind Malta’s purchase was to guarantee gas supply for the long-term at all costs and in fact the cost ended up being exuberantly high considering the opportunities which came later.
The importance in getting good energy deals is related to bringing our excessive spending down which Labour is pushing to new limits. There is also another problem with regards to our procurement of gas however, and that’s the current existing arrangements with Electrogas which owns the gas-fired power-station. Miriam Dalli, the Energy Minister was appointed to her role specifically because she is a trusted confidant of Joseph Muscat’s inner circle and can therefore keep a lid on the corrupt origins of the power-station. The government has also strived to keep complete secrecy in its energy dealings.