Will consumers be worse off if gas distribution were to be liberalised, as the competition watchdog has decided it should? The gas distributors, about 30 of them, say consumers will suffer but the Consumers’ Association disagrees.

A year ago, the Malta Competition and Consumer Affairs Authority was asked to investigate whether an agreement reached with the gas distributors in 1992, giving them exclusive territory to sell cylinders door to door and at fixed points, breaches competition laws.

The authority dragged its feet and it now emerges that a decision was only made on December 17 and immediately communicated to Brussels.

The delay led the distributors to worry about their future and they kept calling for a decision. The issue was raised again before the peak of the festive season and last Thursday, when the distributors protested about the authority’s delay outside the Prime Minister’s office.

It is not hard to understand the distributors’ feelings and resistance. Of course, nobody would like to see one’s business being threatened by competition. What stood out, however, was the rather poor reasoning brought forward by the Chamber of Small and Medium Enterprises – GRTU in defence of its members.

Why should liberalisation become “a second Arriva”, as the GRTU’s representative argued?

Arriva, the company running the transport service, would have provided a better service had the authorities made it their business to ensure that the shuffling of the routes made sense in the first place and also that adequate preparations were made in advance to ensure that the company abides by the provisions of the contract within the least possible time after its introduction.

There is no reason to believe that the liberalisation of gas distribution would not be advantageous to the consumer, provided that steps are taken by the regulating authorities to ensure that they do not resort to abuse.

One argument that was advanced against liberalisation is as absurd as that used by the Labour Party before the referendum on whether Malta should join the European Union. The party had prognosticated, wrongly as it turned out, that Sicilians would cross over and take the people’s jobs.

A distributors’ representative has been reported saying: “If we liberalise, we are opening the doors to distributors from, say, Italy, who will come here with their trucks and sell gas from open spaces and squares. Do you think they will bother with the door-to-door deliveries? This service will definitely stop. Otherwise, they would charge us more for a gas cylinder at our doorstep. Would we be ready to pay €5 more for a cylinder?”

This is sheer scaremongering. Consumers unable to be at home when the gas distributor in their locality calls will find it easier to get a cylinder if these are made easily available at depots or sites close to where they live.

Quite rightly, the Consumers’ Association argued that, if the consumer authority were to rule – as it in fact has done – that the 1992 agreement is not compatible with the law, consumers should not be made to pay for this through price hikes or taxes.

Liberalisation may not guarantee cheaper gas for consumers but it would offer benefits which they do not enjoy now. There may be areas where, through liberalisation, distributors delivering cylinders door to door may experience a drop in client numbers but they would be able to make up for the shortfall by extending their rounds.

Let us hope the Competition Appeals Tribunal approves the decision soonest.

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