A meeting between the government, gas distributors and gas companies will be held at noon today as distributors suspended their service to protest against the granting of distribution licences.
The strike takes effect today and affects deliveries and pick-up from fixed delivery points.
Speaking on behalf of the 30-odd gas distributors, the director general of the Malta Chamber of Small and Medium Enterprises – GRTU, Vince Farrugia said the licences had been negotiated in 1992 with Enemalta, which at the time was the provider and the regulator of LPG.
A contract laid down that gas distributors had their own exclusive territories and, should there be more than one LPG provider, they were obliged to provide for them as well.
The licences issued were exclusive, Mr Farrugia said, and since they covered the whole Maltese territory, no other distribution licences could be issued.
“We have been assured, time and time again, by various ministers, that the privatisation of the gas service would not affect this,” Mr Farrugia said.
Recently, he added, the Malta Resources Authority ignored this and for the past two years gas distributors were in the dark as to what their situation over licences was like as the market was liberalised.
Mr Farrugia said both Liquigas and Easygas had been granted distribution licences and these were being used as leverage for dealing with the distributors.
The GRTU is asking the government to either allow the distributors to keep the licence and retain exclusivity or else, since the market would be liberalised, for the 30 agents to be compensated to the tune of €6 million.
It is asking the government to commit to decide by the end of January.
It said while Easygas Ltd, set to start importing LPG into Malta this week, had found no problems with having its products distributed along with others, Liquigas was requesting its products be delivered separately.
Reacting, Liquigas, which has succeeded Enemalta to provide LPG, defended its right to choose, saying “competition should be encouraged at all stages of the distribution chain and market forces should be allowed to play their part”.
“Liquigas Malta has the right to protect its commercial interests and it is only reasonable it should be able to determine how its products are distributed.”
When challenged whether he was defending a monopolistic situation, Mr Farrugia said some monopolies were inevitable and, in Malta’s case, it was better to have one network of distributors, especially because the country was so small.
He also said the model was present in Belgium and rural Italy and Malta’s situation was similar to theirs.
The government said it had asked the MRA to mediate between the GRTU, gas distributors and Liquigas so that “in the shortest time possible” an agreement on how the distribution system could improve would be reached. This had to be done “with primary consideration being given to the best customer service possible and the least environmental impact”.
Mr Farrugia said asking the MRA to mediate was “a joke, as all this mess was brought about by the MRA” when it issued licences that breached the contract under which existing licences were given.
He said the MRA should have adopted the strategy used by Transport Malta, where it had first waited for the government to buy out bus drivers’ licences before going on with the transport reform.
Gas distributors who spoke to The Times said they were uncertain of their situation. One of them, Fernando Cremona, said this was a blow because he had just invested in two new trucks to provide a better service.
“With these licences, we became worthless,” Mr Cremona said, adding the new companies were using the distributors as a football for negotiations.