A number of petrol stations ran out of fuel yesterday amid panic-buying after talks broke down between the government and the General Workers' Union over Enemalta Corporation's collective agreement.

Stocks of unleaded fuel, petrol and diesel were practically depleted by last night and service stations which did have some fuel left doubted whether their supply would last until this morning.

The situation is likely to get worse today as no agreement was reached at last night's meeting and the union warned it would be escalating its action.

While chaos reigned outside service stations, representatives of the government, Enemalta and the GWU yesterday held several meetings in an attempt to break the deadlock in discussions.

The dispute centres around the financial package of the corporation's collective agreement which expired on December 31, 2001.

When contacted, the secretary of the union's chemical workers' section, Gejtu Mercieca said taking action had been a last resort after its requests were not met.

Economic Services Minister Josef Bonnici said last night the union was demanding "heavy wage increases" which would tax the consumer and the economy.

The government presented the union with counter-proposals and a "fair" package during a long meeting last night but Mr Mercieca said these were not acceptable.

"We were given a take-it-or-leave-it offer which we feel is unacceptable because it discriminates between employees. We have informed the government we will continue with our action until a solution is found," Mr Mercieca said.

The union yesterday morning also ordered over 700 Enemalta employees to stage a two-hour strike between 9 and 11 a.m.

Prof. Bonnici said that when considering a wage increase proposal one had to ensure this was sustainable and did not place undue pressure on the company's competitiveness.

"We are after a fair deal for the economy and any wage increase has to be in line with was is being given to the public sector," he said.

The government said that under the law, essential services such as power supply had to be guaranteed and Enemalta was working to ensure the public was not heavily affected by the dispute.

"At this stage we have exhausted all our options and we are waiting to hear from the union," Prof. Bonnici said.

Talks between the two sides started in earnest two months ago and were nearly concluded but since the issue of finances has to be negotiated directly with a representative of the Finance Ministry talks stalled for over four weeks. This infuriated the union which on Wednesday instructed employees from unloading much-needed diesel from two barges to stock the Delimara power station.

This action led Enemalta to issue a warning the next day saying it did not exclude the possibility of interruptions to the electricity service to the detriment of domestic and industrial consumers.

The person in charge of ordering Enemalta employees to fill the bowsers with fuel destined for petrol stations was yesterday ordered to take industrial action, which means no fuel bowsers are leaving the corporation's plant.

The union action also affects internal and external communications at Enemalta, including answering telephones and communicating by e-mail.

The corporation branded the union's action as illegal claiming they were in breach of the collective agreement and the provisions at law.

The Employment and Industrial Relations Act lays down that the supply of fuel for power stations could not be jeopardised and the Malta Resources Authority had to determine the number of people needed to unload fuel and who would be obliged to do this work, a government spokesman said on Thursday.

When asked about this, Mr Mercieca said the union was not breaking the law because the corporation had only sent its request for such people to unload the fuel in the early morning hours.

The action affecting the fuel bowsers led to long queues all over the island yesterday as word spread like wildfire to stock up on fuel for the weekend. Others panic-bought and filled jerry cans to ensure they did not run out of fuel.

While larger service stations top up their stock regularly, other smaller ones restock at the end of the week and they felt the union had timed the industrial action with this in mind.