Does the fixed energy price strategy work in Malta?

All-in-all, the fixed energy price strategy currently enacted by Government has been successful at smoothing out the efects of the energy price spikes by supporting aggregate demand in Malta, while controlling consumer inflation and thus preserving the purchasing power of consumers.

Does the energy price cap affect Malta's current account balance?

Moreover, in spite of preserving Malta’s international competitiveness, the energy price cap is estimated to have had negative repercussions on Malta’s current account balance driven mainly by higher energy prices and no adjustment in energy or aggregate demand.

How much does electricity cost in Malta?

While Malta has the third-lowest nominal electricity price for domestic consumers in the EU at €0.131 per unit, when adjusted for PPS – a method used to compare costs between countries based on their cost of living – the burden on Maltese families is the lowest in the EU, at 14.33 PPS per 100kWh.

How does the Maltese government deal with retail energy prices?

In this light, policymakers across the EU, including the Maltese Government, have adopted a range of policies aimed at either compensating economic agents for the increase in retail energy prices, or else at cushioning the increase in retail price increases through subsidies to energy distributors or producers.

Does fixed energy price policy affect the Maltese economy?

This study uses a New Keynesian model with a detailed energy block to estimate the macroeconomic impact that the fixed energy price policy, adopted by the Maltese Government, have had on the Maltese economy.

How did the Maltese government deal with the energy crisis?

The Maltese Government’s approach to the energy crisis was characterised by a sustained commitment to control retail price increases of electricity and fuels. This was achieved using subsidies directly transferred to electricity and fuel distributors such as Enemalta and Enemed, aimed at covering any increases in marginal costs.