The Minister of Finances has changed his position over the years in government from being fearful and cautious over energy and electricity subsidies, to boasting in parliament with a sense of bravado that these subsidies will continue indefinitely. The Labour government is successfully fighting the deficit and is moving closer to a surplus but is now in denial over the housing crisis and has completely dismissed the idea that subsidies are a problem to public finances.
There is cross-party consensus on energy subsidies and there also seems to be a consensus about dismissing Enemalta’s growing problems in its balance sheet. Malta’s political elite have resigned to the fact that Malta will always procure expensive electricity and energy from abroad and this burden will somehow be magically reduced with renewable energy sources. Opposition Leader Alex Borg even wants to go as far as to invest in an experimental project in hydrogen.
The Maltese government is forecasting to spend up to €200 million in energy subsidies every year with the Nationalist Party forecasting the same. Surprisingly, no one is considering this as an issue. Oil prices are in the lower range with Brent Crude at $61.85. On the other hand natural gas is in its expensive range at $4.52. Major forecasts state that the oil price will remain low due to over-supply. the higher gas price is more unusual with most forecasts also pinning it in its upper range for next year.
The government has no strategy about energy prices and no contingency plans if another major spike in energy commodities occurs and its only plan is to pour more subsidies and once again rapidly expand the public debt. The Opposition has no plan either.
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