Updated: Opposition seeks compensation for gas prices

Parliament this morning started debating an Opposition motion calling on the government to introduce an energy benefit to help all households in view of sharp rises in the price of bottled gas (LPG).

The motion was moved by Labour MP Joe Mizzi, who criticised the Malta Resources Authority for being ineffective, to the extent that it had fixed a maximum price which was higher than that set by the suppliers themselves after they calculated their profits.

The motion, he said, was calling for publication of the workings of the MRA on gas prices and a review of its mechanisms so that prices safeguarded consumers while being fair to suppliers.

He said the motion was calling on the government to launch talks with stakeholders aimed at establishing stability in gas prices.

The motion then calls for an energy benefit to cover the gas prices and the appointment of a parliamentary committee to investigate the process leading to the privatisation of the Enemalta gas division.

He said that the current situation stemmed from the government's failure to draw up a strategic energy plan. Ten years ago, he said, the government had raised the possibility of a gas pipeline to Malta, but nothing happened. The government then invested in a new power station and an extension to it. Now there was fresh talk on a gas pipeline. There was never so much confusion.

The only constant, he said, was rising prices for power and gas, to the detriment of living standards and competitiveness.

It had been claimed, he said, that liberalisation would mean lower prices. But the opposite had happened with regard to gas prices.

He said that gas prices were not fluctuating in the same way as international prices.

Furthermore, while the gas supplier which took over from Enemalta two years ago (Liquigas) had made a commitment to invest €25 million in a new gas bottling plant, the price increases had come about before the investment was made.

MOTION 'DOES NOT REFLECT REALITY' - PULLICINO

Resources Minister George Pullicino said the opposition motion was not a reflection of the situation in the LPG sector.

Mr Mizzi was still mired in the nostalgia of the past, which included needless subsidies which taxpayers paid for.

The government had assumed the role of regulator in this sector after liberalisation. In privatising the sector, the government had made provision for investment in a new gas bottling plant because the Qajjenza plant was old, and it was also dangerous to neighbouring households which had granted a building permit by a Labour government.

The Opposition criticised the government for allegedly lacking an energy plan. Yet Labour governments bought old, second hand and inefficient energy generating plants. The Opposition had resisted the building of the Delimara power station and was objecting to an extension which would allow the phasing out of the Marsa power station, thus reducing harmful emissions by 400,000 tons.

Mr Pullicino said Liquigas taken over the Enemalta gas division after a call for tenders and it would be building a new €25m gas plant in line with EU rules.

Liquigas, however, had not been granted a monopoly and another operator had actually entered the market. This was in the interests of the consumers.

Under Enemalta, gas products were heavily subsidised by taxpayers. Now prices reflected the international LPG gas prices - which had been rising fast - and there were no subsidies. Were there to be subsidies, taxpayers would still be footing the bill.

Mr Pullicino said the government was committed not to raise taxes, a commitment which Labour had not made.

He also pointed out that Malta still lacked the infrastructure to import natural gas (not LPG) if a pipeline was laid. A gas pipeline would also not be financially viable unless there was EU assistance.

Mr Pullicino said the MRA mechanism to regulate gas prices was public on the MRA website. It had been drawn up after consultation in which the PL and the GWU opted not to participate in. It was therefore shameful that it was now being claimed that this mechanism was being hidden.

Mr Pullicino insisted, however, that the MRA's workings, where they included sensitive information from the suppliers, could not be published.

The minister also pointed out that the MRA on January 20 invited the Pl for a presentation on its gas prices mechanism. Instead of accepting, the PL asked for more information about the meeting. The MRA replied last week and had had no reply since.