Fuel liberalisation process gets going

The Malta Resources Authority yesterday launched the much anticipated consultation paper on fuel liberalisation.

Malta was obliged under the EU accession treaty to abolish monopoly rights in the importation, stocking and wholesale of petroleum products by not later than last December 31.

The government had announced it would be delaying the process at the 11th hour and what is effectively the final stage before Cabinet has its last say on the matter started only yesterday.

The consultation period is one month, closing at end of business on Monday, May 22. The paper can be downloaded from the MRA website at www.mra.org.mt and interested stakeholders can comment on the issues raised in the paper and also on other matters they consider relevant.

Liberalisation, in theory, should bring about greater competition and cheaper fuel prices. Service station owners will be able to import fuels directly.

The process could also bring about the importation and distribution of autogases, such as LPG, for use in vehicles as a cheaper and more eco friendly alternative to other fossil fuels.

The document, in fact, says that it expects autogas to be available for vehicles, adding that the authority will actively promote its use to contribute to the reduction of harmful emissions.

Liberalisation could also, in theory, break Enemalta's monopoly on gas bottling. Gas distribution is also being proposed to be under an open lenience arrangement.

Another issue which will certainly interest prospective importers and retailers is the pricing regulation. The MRA is proposing to establish a "reasonable" mark-up per litre of fuel sold. The profit cap will be published by the authority per category of fuel prior to the liberalisation.

Aviation fuel and marine bunkering services had been liberalised since 2004 and 1995 respectively while manufacture of biofuels was not included in the monopoly. The document, nonetheless, proposes regulation both for the production and importation of the substance.

The consultation paper incorporates draft licence forms and conditions for the various operations and activities.

Direct meetings with MRA officials can be organised by appointment during the consultation period and comments in writing or by e-mail will be received by the MRA.

The revised proposals, taking into account the feedback received, will be submitted for Cabinet's approval by mid-May. The market will be liberalised soon after that date, the MRA said.