Updated: Strike directive for gas distributors remains in place

Adds Liquigas statement insisting on consumer choice of distribution service

The strike directive issued by the GRTU to gas distributors has remained in place, with no breakthrough in talks on whether the distributors may sell the products of Liquigas and new company EasyGas, which started importing its gas cylinders today.

The distributors are refusing to sell gas cylinders door to door or from fixed plants, including the plant at Qajjenza..

GRTU Director General Vince Farrugia confirmed that no decision had been issued yet by the Office of Fair Competition.

The GRTU is insisting with the Office that the distributors are licenced retailers who paid for their licence and it would be unlawful and monopolistic if their were restricted to selling just one company's product.

Liquigas is arguing that distributors selling its product should not sell products of other companies.

Mr Farrugia said the distributors would resume sales as soon as a solution was offered by the government. He said that was the government and its agencies which had issued the sales licences to the suppliers despite the previous arrangements made with the distributors, and it was up to them to offer a solution or compensation to the licensed distributors.

Earlier, EasyGas said its position was close to that if the GRTU and it had no objection to the distributors selling the products of both companies.

Easygas said that it did not make sense for companies to have their own distributors since this would create confusion.

The government is understood to also prefer having one distributor - for traffic management and environmental reasons.

Easygas said that the time for exclusive contracts was over as these hindered efficiency.

It said that the current dispute was having a detrimental effect on consumers, who should be able to enjoy the benefits of market liberalisation through better rates and an improved service.

The company said that the interest of consumer and no other interests should be at the heart of each argument

LIQUIGAS INSISTS ON CONSUMER CHOICE

Liquigas Malta in a reaction to developments, said that the GRTU strike was creating hardship to consumers and disruption to trade and business at this particular time of the year.

"The distributors want to preserve their territorial exclusivity in the cylinder distribution market by insisting that they should retain a monopoly on the distribution of all sources of supply. This prevents competition at the distribution level.

"The distributors have always presented themselves and acted together as a collective entity being the GRTU. Consequently, the distributors hold a collective dominant position in the Maltese market. Ultimately, this monopoly does not serve the real interest of the consumer," the compnay said.

It said it wanted to significantly upgrade the quality of the distribution service, so as to develop a better service for its customers.

"Liquigas Malta has the right to protect its commercial interests and it is only reasonable that it should be able to determine how its products are distributed," it insisted.

"While abiding by its legal obligations, Liquigas maintains that, in the case of door to door supply of LPG cylinders by means of trucks the consumer must have the opportunity to differentiate products even at the level of the distributor’s vehicle."

See also:

http://www.timesofmalta.com/articles/view/20101223/local/ruling-by-fair-competition-office-seen-as-key-to-gas-dispute