Resolving the gas distribution dispute

Gas distributors are again resorting to sabre rattling by threatening to take industrial action if an outstanding dispute is not resolved by the consumer affairs regulator.

The issue revolves around the inexplicable delay of the Malta Competition and Consumer Affairs Authority to decide whether a 1992 agreement giving 30 gas distributors exclusive rights to sell gas cylinders to consumers living in specific geographical areas is still valid.

Distributors claim the agreement signed with Enemalta in 1992 is still valid and should be reinforced. One of the gas importers is challenging the validity of this agreement and the distributors have been waiting since the beginning of this year for a decision by the regulator on whether the agreement is still valid in full or in part.

The distributors argue that enough time has passed for this decision to be taken and made known to all interested parties. Until this clarification is obtained, they feel uncertain about their future. They seem to be ready to accept the outcome of the regulator’s deliberations but expect to be compensated if it is decided that the agreement in question is no longer valid.

So far, not much has been said about how consumers are and will be affected by a confirmation or otherwise of this agreement.

Arrangements that restrain trade are rarely, if ever, in the consumers’ best interests. Giving exclusive rights to business operators to trade exclusively in a defined geographical area could possibly be classified as an agreement restraining trade.

However, if an agreement is legally binding, even if it is not in the best interest of consumers, it can only be repealed if both parties agree to do so. Presumably, if the consumer affairs regulator feels the agreement between Enemalta and the gas distributors is legally valid but is against the interest of consumers because it restricts competition, then some kind of compensation needs to be considered to put an end to this unacceptable situation.

It is ironic that the consumer affairs regulator is taking so long to decide on this matter that is undoubtedly affecting not just the gas distributors but also consumers who could so easily be used as pawns in this dispute.

The risk of this procrastination is not limited to the threat of ‘freezing the distribution system’ of gas to households at this important time of the year but also of leaving consumers unprotected from the whims of business operators who may have a dominant position in the market.

The time has come for the Malta Competition Authority to protect the interest of consumers as it is bound to do by its statute and decide on this issue without further delay. If it is decided that the gas distributors indeed have legal rights that need to be respected, then a formula should be found to compensate them for any arbitrary cancellation of such rights.

Distributors should be careful not to abuse their dominant position in the market by threatening to stop the supply of gas cylinders to household at the peak of winter and as the Christmas festivities approach. Even if their threats are just an exercise in sabre rattling to get the regulator to decide on this dispute, they should still never use helpless consumers as pawns to speed up a resolution.

The Government, despite this delicate pre-election time, should exercise its authority in order to ensure that the consumer affairs regulator as well as the operators respect consumers’ rights at all times.