International oil prices spike will not hit prices in Malta - Dalli
The government insists it will provide stability
The spike in international oil prices will not be reflected in local consumer prices, Energy Minister Miriam Dalli said on Tuesday, as the US-Israel war with Iran intensified.
She made her remarks in a Facebook post after a Cabinet meeting.
Prime Minister Robert Abela on Monday told parliament that the government would guard against any economic impact from the current war in the Gulf.
Dalli said the government was giving the people peace of mind and stability, as it had done during the pandemic and other conflicts in the Middle East and the ongoing war in Ukraine.
She said the turmoil abroad would not impact local prices for power and fuel.
Earlier on Tuesday, the government said Malta’s energy and fuel sector is diversified and includes hedging agreements to ensure stability.
Warning of 'spike' in eurozone inflation
Meanwhile, the European Central Bank warned on Tuesday that a lengthy Middle East conflict and sustained drop in energy supplies could trigger a "spike" in eurozone inflation and hit regional growth.
"A jump in energy prices puts upward pressure on inflation, especially in the near term," ECB chief economist Philip Lane said in an interview with the Financial Times.
The conflict would also be "negative for economic activity", he said, according to a transcript of the interview released by the central bank.
The US and Israeli attacks on the Islamic republic and Iran's retaliatory strikes in the region have disrupted energy flows, with the crucial Strait of Hormuz -- through which about a fifth of global oil transits -- effectively closed off.
Qatar has also halted liquefied natural gas production following Iranian attacks on state processing facilities.
Both oil and gas prices have jumped sharply since the war began at the weekend.
After surging in 2022 due to the energy shock triggered by Russia's invasion of Ukraine, inflation in the 21-nation euro area has in recent times fallen back to around the ECB's two-percent target.
The Frankfurt-based central bank has kept its key interest rate on hold at two percent since June last year. It holds its next rate-setting meeting on March 1