MRA considers appealing aviation fuel ruling
The Board of the Malta Resources Authority is evaluating a recent decision of the authority's Appeals Board which overturned a decision taken by the Malta Resources Authority a year ago. The Appeals Board had concluded that Enemalta had set an...
The Board of the Malta Resources Authority is evaluating a recent decision of the authority's Appeals Board which overturned a decision taken by the Malta Resources Authority a year ago. The Appeals Board had concluded that Enemalta had set an excessive price for the use of its aviation fuel storage tanks.
The Appeals Board found that the price quoted by Enemalta was excessive and abusive and constituted an entry barrier. It also said that the authority had failed to fulfil its duty to ensure interconnectivity of services and fair competition.
The Appeals Board went so far as to say that prima facie Enemalta's behaviour was a "constructive refusal to grant access", which constituted a material illegality as well as a lack of reasonableness and proportionality in the authority's decision.
"We are evaluating the decision of the Appeals Board and will be determining whether there are grounds for appeal. In the circumstances, any comments relating to the judgment are premature and inappropriate," CEO Antoine Riolo said when contacted.
Legal sources said the MRA reaction was strange:
"The decision of the MRA Appeals Board was itself an appeal and therefore, by definition, there is no appeal from an appeal.
"One can appeal to the Court of Appeal on points of law only - a very restricted form of appeal which is hardly ever successful - and not on the merits of the case."
The ruling is very embarrassing for the authority, which is there to regulate the resources sector, although it shrugged off the competition aspect of the complaint lodged by Enemalta's competitor Attard Services, saying that this fell under the remit of the Office for Fair Trading.
Shell, represented locally by Attard Services, was granted a licence in June 2004 to provide aviation fuel but has to use the storage tanks belonging to Enemalta, its competitor, which until 2004 held the monopoly.
It had complained that the costs being charged by Enemalta were high and unjustified but the MRA had ruled that this did not constitute a barrier to entry and therefore unfair competition.
Shell believes that the price should be around $8.25 per metric tonne while Enemalta was quoting $22.27. The board has directed the authority to instruct Enemalta to present segregated accounts within one month, which should show the true costs related to the infrastructure, with justification.
Within three months, the authority must establish a fair price for the operation, explaining its reasoning to Enemalta and Shell.
The next step would be for it or any financial or economic entity on its behalf to establish the pricing structure of aviation fuel operations - which will take another three months.
The Appeals Board found that the price quoted by Enemalta was excessive and abusive and constituted an entry barrier. It also said that the authority had failed to fulfil its duty to ensure interconnectivity of services and fair competition.
The Appeals Board went so far as to say that prima facie Enemalta's behaviour was a "constructive refusal to grant access", which constituted a material illegality as well as a lack of reasonableness and proportionality in the authority's decision.
"We are evaluating the decision of the Appeals Board and will be determining whether there are grounds for appeal. In the circumstances, any comments relating to the judgment are premature and inappropriate," CEO Antoine Riolo said when contacted.
Legal sources said the MRA reaction was strange:
"The decision of the MRA Appeals Board was itself an appeal and therefore, by definition, there is no appeal from an appeal.
"One can appeal to the Court of Appeal on points of law only - a very restricted form of appeal which is hardly ever successful - and not on the merits of the case."
The ruling is very embarrassing for the authority, which is there to regulate the resources sector, although it shrugged off the competition aspect of the complaint lodged by Enemalta's competitor Attard Services, saying that this fell under the remit of the Office for Fair Trading.
Shell, represented locally by Attard Services, was granted a licence in June 2004 to provide aviation fuel but has to use the storage tanks belonging to Enemalta, its competitor, which until 2004 held the monopoly.
It had complained that the costs being charged by Enemalta were high and unjustified but the MRA had ruled that this did not constitute a barrier to entry and therefore unfair competition.
Shell believes that the price should be around $8.25 per metric tonne while Enemalta was quoting $22.27. The board has directed the authority to instruct Enemalta to present segregated accounts within one month, which should show the true costs related to the infrastructure, with justification.
Within three months, the authority must establish a fair price for the operation, explaining its reasoning to Enemalta and Shell.
The next step would be for it or any financial or economic entity on its behalf to establish the pricing structure of aviation fuel operations - which will take another three months.