Readers of this website may remember Miriam Dalli’s gas trade last April when Russia was propagating the idea that Europe will freeze without Russian gas. Miriam Dalli bought the propaganda and bought Malta’s future gas supplies with this fear in mind. In order to avoid being exposed to the volatility in the gas price, Miriam Dalli made a deal with Italian energy company Enel where Malta buys gas at market rates, but pegged with the price changes of Brent crude, so as to be exposed to the price changes in oil instead of gas. The government has no hedges in place for the contract, so it’s like we’re just simply buying directly from the open market without any changes or protection whatsoever.
Since then the price of Brent crude fell by 19%.
The price of US and European natural gas fell by 38%.