Thursday 17 February 2022

How is Malta swerving energy prices?

Rising energy bills have become a concern for all British households during the past few months but one small country is reportedly maintaining a stable market in midst of the chaos – but how?

Malta is around 0.13% the size of the UK but isn’t seeing its prices rocket and this has been linked to an 18-year supply deal signed between the previous Maltese government and Azerbaijan’s SOCAR Energy.

The deal for liquefied natural gas (LNG) had an agreement for a seven-year fixed price that has meant fuel price rises have not the pocket of Maltese impacted households, whilst Brits are set to see their bills rise by as much as 50% in April.

For more detail on the price cap, you can read our full article here.

The deal with SOCAR was struck in 2014 and led to criticism of former Prime Minister Joseph Muscat at the time, with many stating the fixed prices had allowed a foreign energy company to profit at the expense of Maltese citizens.

However, with the fixed price set to expire this March, the decision to freeze prices now appears a shrewd one; as Maltese households have saved far more money than those in the UK or the rest of Europe throughout the energy crisis.

Muscat’s decision is now being reflected on with appreciation, as the current government now looks set to freeze prices with handouts to cover the costs, as the SOCAR deal meets the end.

The move to LNG also demonstrated some environmental upsides, with carbon emissions being reduced by half between 2017 and 2020 at the ElectroGas plant where it’s controlled.

It commented: “[This] project has significantly reduced the environmental impact and moved Malta to a more sustainable and reliable energy supply. That’s good news for the people of Malta and better news for the planet.”