Fuel station owner Mario Camilleri took a bold step in January last year when he decided to lower the price of diesel by 2c. He had been offered a higher profit margin on diesel by fuel supplier San Lucian (a subsidiary of the Falzon Group) and, rather than retain it, Mr Camilleri decided to pass that on to consumers.

For the first time, a fuel station was competing for customers by cutting the price of diesel. While everyone else, irrespective of fuel supplier, was selling diesel at €1.35 a litre, M&N Camilleri was offering consumers the fuel at €1.33.

However, the situation did not last long. Even before the first litre of low-priced diesel was sold, Mr Camilleri was pressured by his fuel supplier to put the price back up.

At the time it was pretty evident to everyone that what had happened was simply a confirmation of the existence of a cartel that prevented price competition in the fuel market despite liberalisation. The hunch was reaffirmed the other day when the Malta Competition and Consumer Affairs Authority released the findings of its investigation into the incident.

The conclusions are clear. The regulator had no doubt that when the director and owner of the Falzon Group contacted Mr Camilleri, pressure was exerted to revert the price to €1.35. The fact that Mr Camilleri succumbed to that pressure – the law makes no exceptions in this regard – was enough for the watchdog to conclude that the two conspired to fix the price.

While Mr Camilleri was let off the hook because his original action was intended to benefit the consumer, the regulator wanted to impose an administrative fine on the supplier but could not. A Constitutional Court ruling earlier this year slammed its legal ability to impose penalties in cases it investigates. The court ruling threw a massive spanner in the works.

The question many are left asking is what happens next? For starters the legal uncertainty surrounding the watchdog’s power, or lack of it, should be ironed out. It is useless having a set-up tasked to regulate competition but is toothless because of some legal anomaly.

The government needs to urgently push forward legislation to rectify this situation, otherwise the big boys will simply keep getting away with it. The free market is good but there needs to be a system of checks and balances and strong regulators backed up by solid legislation is one way to ensure the free market functions well for consumers.

However, it is at the consumer level that the regulator must do more. It remains obvious to everyone that the behaviour of those involved in the fuel market today is no different from that which the watchdog found objectionable in this particular case.

Motorists cannot shop around for cheaper diesel since this fuel is sold at the maximum retail price across the island irrespective of who the supplier is. It is worth noting that, contrary to petrol, the diesel market has more than one supplier, which in theory should encourage more competition.

The regulator must now take the bold step and carry out a market-wide investigation of the fuel market, including the behaviour of the state-owned Enemed, by far the largest supplier on the island, to determine why fuel stations sell diesel at a fixed price.

Liberalisation has to be translated into meaningful competition that benefits consumers. Short of this, fuel liberalisation will just be another item on the checklist the island ticked when it joined the EU.