Matthew Xuereb
Government may help needy buy gas
LPG operations transferred to private company
Finance Minister Tonio Fenech said yesterday the government was willing to consider helping low-income families buy liquefied petroleum gas (LPG), whose new price has yet to be set.
Gas cylinders have been heavily subsidised over the years. Enemalta has been selling a cylinder for €5 when its actual production cost was about €12, the minister said.
Now that Enemalta has transferred the management and operation of its LPG activities to Gasco Consortium, the price of a gas cylinder is expected to rise. A €14 price tag has already been mentioned in the media.
Mr Fenech said that before establishing the new price, Gasco would first make a submission to the Malta Resources Authority. The government would be prepared to consider assistance to low-income families if that were required.
Enemalta Corporation and Gasco Consortium, a joint venture between Multigas Limited and Liquigas SpA of Italy, yesterday signed a 33-year concession agreement whereby the LPG operations were transferred to the new company.
Gasco Energy Ltd will be responsible for the storage and bottling while Liquigas Malta Ltd will handle the distribution of gas cylinders.
Gasco Energy Ltd chief executive Roberto Capelluto said Gasco will be investing €25 million in a new gas bottling plant at Bengħajsa and will, over the next three years, dismantle the storage and bottling plant at Qajjenza.
The agreement and provisions for the transfer of land for the new gas plant were approved by Parliament last month but Malta Environment and Planning Authority permits have not yet been issued.
After 33 years - in 2041 - the company will transfer the Bengħajsa storage and bottling facility back to Enemalta as an asset.
For now, Enemalta will continue to be responsible for the storage and bottling of LPG. As from February, the cylinders will be purchased by Liquigas Malta Ltd and distributed through the 29 distributors presently working for Enemalta.
Mr Cepelluto said the new plant at Bengħajsa will have a larger storage capacity and will be able to hold an estimated 5,000 metric tonnes of LPG, nearly double the Qajjenza facility, which stores 2,800 metric tonnes.
Moreover, new state-of-the-art equipment will enable the company to bottle 1,200 cylinders per hour as opposed to the 800 cylinders hourly throughput achieved by Enemalta.
Mr Capelluto said Gasco will be focusing on the inspection and testing of cylinders and will improve cylinder loading and offloading as well as their distribution.
The company is also planning to introduce autogas, a replacement fuel for cars. Apart from being a safer and more environmentally-friendly fuel, autogas is cheaper than other fuels and can be easily distributed.
Although this is a new type of fuel for Malta, it is widely used in other European countries. In Italy, he said, cars running on LPG can save up to 40 per cent on their fuel costs.
He said the company would also introduce LPG for air conditioning. Consumers would have to change the air conditioning system but retain the existing piping. This type of energy is more efficient and allows the equipment to operate more silently.
Outlining more of the company's plans, Mr Capelluto said consumers in Malta should expect an improved distribution system, which also includes additional sales points and regular and reliable LPG supply even in peak winter season.
Liquigas Malta, which will be responsible for distribution from February 1, will be promoting small bulk installations particularly for larger urban concentrations.
The company is willing to create an underground network of canals through which it will provide LPG which will be metered - just like water and electricity - with consumers paying for what they consume.
Enemalta chairman Alex Tranter said the signing was the result of two years of negotiation with "a strong professional partner". He said this was the first commercialisation process that will enable Enemalta to focus entirely on electricity generation and distribution.
Enemalta will now start negotiations with the preferred bidder for the transfer of the petroleum division.
He said that during yesterday's signing, Gasco officials handed Enemalta €4.5 million, being the first payment for the concession. Over the 33-year period, Gasco will pay Enemalta an annual fee.
Mr Fenech said Gasco will not have any monopolistic privileges and will be subject to possible competition now that the gas sector has been liberalised.
The dismantling of the old plant is expected to cost the company €250,000 and, after three years, the land would be free for possible development, Foreign Minister Tonio Borg had said during a political activity last month when the political parties were at loggerheads over the concession of the land in Bengħajsa.
Also present for yesterday's ceremony were Liquigas SpA. chairman Paolo Zani, managing director Paolo Dal Lago and Gasco Energy Ltd chairman Louis Farrugia.
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In Discussion
16 Comments
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Albert Attard
Nov 29th 2008, 09:37
@lgalea
having piped gas is much more convineint then carrying around these heavy gas cylinders and having the trucks blocking narrow streets to service households - Piped gas is the norm in many countries, Malta managed to abolish it in the 70's giving lots of people backaches and chipped tarmac (as the delivery gas person unloads the tanks with a BANG to the street) + lots of wasted time for the mara tad dar (if there is a mara tad dar around otherwise you need to drive up to a gas depot available once a week) to make sure not to miss the truck on the day of delivery. So the initial infrastraction may be well worthed - However one will naturally ask if it will be worthed priceswise compared say to electricity ( to cook and heat the house when the price of gas is going to tripple! )
lgalea
Nov 28th 2008, 22:41
"The company is willing to create an underground network of canals through which it will provide LPG which will be metered - just like water and electricity - with consumers paying for what they consume."
Is this not what the consumers had even before WWII?
Does this mean that we will see our roads being dug up for the umpteenth time?
Are we going to see yet numerous other tunnels duq up perhaps also criss-crossing under our properties?
henry galea
Nov 28th 2008, 18:28
What ever the outcome, can someone think of old people, that they cannot carry gas bottles inside to the kitchen, mostly when there are stairs. I suggest very smaller bottles that needs replacement every week. Why survays about students backpack weight are carried out, and old people are not considered, or they are only usefull to babysit.
Andrew Cumbo
Nov 28th 2008, 17:35
I don’t believe Gasco statement that LPG will be cheaper here. They don’t know P.N. government yet. As soon as Government will notice that LPG is at a good price, our government will introduce a sort of tariff and make it at a higher price. Who can deny this? We are buying Petrol and Diesel much more expensive than other E.U. countries.( compared to our wages) Some countries in E.U. reduced fuel prices but this government made the opposite, now saying that the refined oil price is still at a high price. By the way, before March election they all mentioned the crude oil price, to justify fuel surcharge.
Who do you think we are to believe you Mr. Tonio Fenech that the price for a gas cylinder is going to be regulated by Malta Resources Authority? I might believe you if things were the opposite way round. First Gasco finalise the price with Malta Resources Authority and then make the deal to buy this entity. And this is what Labour said about this issue. We must and foremost assure Maltese citizens rights before we privatise an entity.
v.vella
Nov 28th 2008, 16:25
The first person who wishes me a merry christmas will get a piece of my mind after this!
lgalea
Nov 28th 2008, 15:47
How about other companies importing gas cylinders already filled up from other countries?
They cannot be stopped since the Government would be infringing the freedom of movement of goods and services.
deb bugeja
Nov 28th 2008, 13:57
With the high cost of living, everyone is bound to be NEEDY.
I am for the government in helping the real needy ones. But are all they needy?
Can any one tell me those assumed single parents who put 'unknown father' on the child s certificate and yet are still living with the father and yet they benefit from social welfare . are they considered as needy too.
MARK MIFSUD BONNICI
Nov 28th 2008, 13:27
TALK ABOUT LEGALIZED MONOPOLY!!!!!
GASCO PLAN TO INVEST 25 MILLION EURO. CAN ANYONE HONESTLY SEE ANY OTHER COMPANY WILLING TO FORK OUT A SIMILAR INVESTMENT IN ORDER TO COMPETE? NOT LIKELY, CONSIDERING THE NUMBER OF HOUSEHOLDS.
AS THINGS STAND WE ARE WE ARE AT GACSO'S MERCY.
Joseph DeBattista
Nov 28th 2008, 11:50
Mr. Minister,who do you think you are kidding? What you should have done is made sure that we have a serious regulatory authoritythathas the autonomy and tools to control prices especially those of monopolies like this one. The last thing we need is more subsidies paid for from the pockets of the people to an uncontollable ever increasing number of needy 'families'
E Gatt
Nov 28th 2008, 11:41
The government is ready to help the needy by subsidising the price of gas for them. Remember that help is limited and that this help will have to be reduced by a further €4.2m after the Gov/Union negotiated W&E tariffs.
I Gatt
Nov 28th 2008, 10:41
Unbelievable....! Whilst most nations are trying to quell the damage caused by the 'Credit Crunch' our government is intent in turning it into a 'Credit punch' below the belt for most of us that is.
Some countries are reducing or removing VAT temporarily this to generate commerce, fuel prices are being reduced, Christmas sales encouraged to start early and so on - yet we keep on being taxed and have to cope with one surprise after another. The measly few Euro increase is nothing compared to the extra we have to fork out due to the increase in vehicle road tax, leisure boat tax, utility bills etc. - if the government wants to be fair why does he not increase our salaries proportionately?
Have those families and individuals who are living close to the poverty line and who are exempt from state aid, being given the attention they deserve? And as a final note can we please have realistic cost of living figures.
Franco Farrugia
Nov 28th 2008, 10:16
How disgusting. How absolutely disgusting.
I admit that we cannot continue subsidising everything and at that amount: but to suddenly stop these subsidies when the Govt could have started gradually reducing these subsidisies and informing the people what is happening, would have been more the order of the day. But no, the Government was unwilling to do so and left everything for the day after being re-elected.
Oh, well.
C Cassar
Nov 28th 2008, 10:09
"Mr Fenech said that before establishing the new price, Gasco would first make a submission to the Malta Resources Authority."
Are we supposed to believe that Gasco has bought the LPG facilities from Enemalta without knowing what price they will be allowed to charge for the gas? That is, without knowing whether they even stand to make a return on their investment? Pull the other one, Minister!
John L Gatt
Nov 28th 2008, 10:04
WOW.......at 14 euros per gas cylinder, that is really expensive for the average family and pensioners (like me)
Now I have to be extra extra careful with my gas /water/electricity usage which I have always been.
It looks like a bleak Christmas and New Year for everyone.
lgalea
Nov 28th 2008, 09:56
Nice orders from the eu.
Privatize a government / parastatal utility, give it to the private sector to skin the people alive, and expect the people to take it while smiling.
This is another negative effect of eu membership.
Robert Cassar
Nov 28th 2008, 09:32
Euro 14 / tank! What a rip off (considering the wage brackets we have in Malta)
It seems that we will have no options here but to cut the few trees we have left and use its wood to cook and heat our houses !!