Despite the fact that Minister for Finance has been constantly harping about cutting back government expenditure and being prudent, Miriam Dalli’s Ministry for Energy announced last year a very horrible gas purchase deal whereby the government started buying gas pegged with the price changes of oil instead of those with the actual price of gas. The trade was basically a bet based on the speculative theory that Russia was going to win the gas war and oil prices were to remain at more reasonable rates when the exact opposite happened. The price of gas is way below war levels while the price of oil remains above. The Labour Party along with some of its political candidates were constantly harping on its theory that Russia would win the gas war. The changes to the price of oil and gas since Miriam Dalli’s announcement was made in April last year are listed below:
Brent Crude: -24%
Natural gas (US): -70%
Robert Abela has also recently announced that the government was going to spend €600 million to subsidise electricity bills this year alone but a large part of this subsidy is only to cover the premium that the Maltese government is paying for its gas purchases. Electricity prices have stabilised in Europe, and will keep stabilising further as the reduction in the price of energy has a latent effect on the consumer’s bill. Miriam Dalli also defended her trade in January by saying that the price of natural gas was to increase again but only went down ever since. Historically, the price of natural gas often goes down even more as Summer approaches, so it may still crash even more.