Last ditch attempt to keep duty-free fuel

A number of EU countries including Malta will today make a last ditch attempt to win back a transitory derogation allowing duty-free fuel to be sold to pleasure craft and aircraft.

The issue is due to be raised today during a meeting of EU Finance Ministers in Brussels attended by Prime Minister Lawrence Gonzi in his capacity as Minister of Finance.

The European Commission last year decided to turn down an application from Malta and other member states asking to be granted a further two years, beyond the end of 2006, during which pleasure craft and aircraft can avail themselves of duty-free fuel.

The Commission argues that the continuation of such a derogation goes against the proper functioning of the EU's internal market, competition and environmental policy.

Sources close to the Economic and Finance Council (Ecofin) meeting yesterday told The Times that the countries affected by this decision - Malta, Belgium, the UK, France, Sweden and Portugal - have specifically asked for this item to be put on the agenda.

However the sources said it is very unlikely they will be given what they want.

Access to duty-free fuel is considered to be one of Malta's competitive advantages, particularly when it comes to super yacht facilities.

Yacht marina operators around the island have said they are finding it difficult to decide how they should proceed on demands for duty-free fuel, particularly from foreign owners of super yachts. They claimed they had not been given any guidelines by the Maltese authorities following the EU's decision.

Asked whether Malta will be given some time to adopt the new legislation, a spokesman for the Commission said the Maltese authorities should have adapted their legislation by December 31, 2006, when the derogation expired. "Member states cannot claim they didn't have sufficient time to adapt their legislation," the spokesman said.