Fuel to be liberalised in summer, Brussels told

The government has told the European Commission that it will lift Enemalta's monopoly on the importation of fuel by summer, more than one-and-a-half years late.

According to the accession treaty between Malta and the EU, the importation of fuel for internal consumption had to be fully liberalised by January 1, 2006.

A source within the Commission told The Times that the government had just sent its reply to a first warning letter issued by the EU executive on the matter last October.

"We can confirm that last week we received a reply to our legal proceedings initiated in October. In its reply the Maltese government said that it was encountering technical problems in liberalising this sector and is now planning to lift Enemalta's monopoly during the third quarter of 2007," the source said.

A few days before the original deadline to end the monopoly expired, the government had announced a delay of three months - until the end of March 2006.

But that deadline passed too despite several reminders sent by the Commission. Enemalta remains the only company in Malta licensed to import fuel products. Asked whether the government's response has now satisfied the requirements of the accession treaty, the Commission source said it did not.

"We are not happy with the situation as fuel liberalisation in Malta is very late. The government has just confirmed to us in writing that the process will continue to be late. The Commission is currently discussing whether to proceed with its legal procedures against Malta by moving onto the second stage of legal proceedings and issue a reasoned opinion."

According to Article 31 of the EC Treaty, member states are obliged to adjust any state monopolies of a commercial character so as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of member states.

In its warning letter, the Commission had complained that no trading licences have yet been issued and Enemalta Corporation was still the only company authorised to import petroleum for the inland fuel market.

Last April a consultation process was launched by the Malta Resources Authority (MRA) on the issue.

MRA sources have told The Times that this process has now been closed and an unpublished policy paper was approved by the Cabinet recently. The Cabinet agreed to the strategy suggested by MRA: That the sector would be opened up to competition in the third quarter of 2007, the MRA sources said.

It is known that a number of private companies, including international fuel giants such as Shell, have shown interest in penetrating the Maltese market but have had to delay their plans until liberalisation takes place.

This will allow owners of service stations to import their own petrol, LRP and diesel. They will need to be in possession of both a petrol station and a wholesaler's licence granted by the MRA.