Issue link: https://maltatoday.uberflip.com/i/1546553
4 maltatoday | SUNDAY • 13 SEPTEMBER 2026 NEWS CONTINUES FROM PAGE 1 In January next year the sec- ond tranche of tax cuts for parents will kick in as part of a three-year reduction an- nounced in Budget 2026. Gov- ernment is unlikely to go back on this commitment but the belt-tightening could mean that lavish electoral promises are postponed. One of the key electoral pledges was the €1,000 super bonus to every worker, an out- lay that would cost govern- ment €200 million per year. It remains unclear whether this election promise will be im- plemented in the next budget. The problem circles back to the hefty outlay on fuel and energy subsidies in an interna- tional environment that pro- vides no stability. And diesel is a crucial component because it is the fuel mostly used in commercial and industrial ve- hicles thus a direct contribu- tor to inflation. Last week, the European Central Bank increased bor- rowing costs to stop expensive energy from fuelling lasting inflation. The ECB increased its key three interest rates by 0.25%, bringing the deposit rate to 2.5%. It was the sec- ond rate hike in three months and came as Brent crude oil climbed back above $100 a barrel as the conflict between the United States and Iran continued to disrupt traffic through the Strait of Hormuz. But while all fuels have seen price hikes, diesel's upward climb is steeper because of a drop in refinery processing and dwindling European stockpiles. Data sourced from the European Commission's Weekly Oil Bulletin shows that between January this year and the first week of Sep- tember, the price of diesel (stripped of all taxation) increased by an average 66% across the EU. But while diesel prices in- creased by a whopping 90% and 81% in Slovenia and Italy respectively in the nine-month time window, Maltese motor- ists saw no increase at all. The lowest increase was in Hunga- ry, where diesel still shot up by 45%, followed by Finland with 51%. The retail price of diesel in Malta stands at €1.21 per li- tre, by far the cheapest across the European Union and un- changed since June 2020 when government introduced an across-the-board 7c per litre cut in fuel pump prices to mit- igate the impact of the COVID pandemic. Hefty subsidies were eventually introduced to maintain stable electricity and fuel prices as in- ternational oil and gas markets buckled when Russia invaded Ukraine in 2022. Conflict in t h e Middle East sparked by US and Israeli attacks on Iran and the subsequent retal- iation that led to ship- ping restrictions in the Strait of Hormuz earlier this year saw oil prices spike. The upward trajec- tory took a break around June when a ceasefire was agreed but in the wake of renewed hostilities, oil prices have shot up again. As a result, the subsi- dy portion for diesel has more than doubled with the finance minister seeing no end in sight for the upward trajectory. Juliana Zammit contributed to this piece. Diesel subsidy more than doubles in three months A petrol station advert on 28 August by the Energy Ministry comparing fuel prices in Malta with those of other EU countries in a bid to hammer home the point the cheaper rates Maltese motorists pay (Photo: Kurt Sansone/ MaltaToday) But while all fuels have seen price hikes, diesel's upward climb is steeper because of a drop in refinery processing and dwindling European stockpiles