Gas distributors have been accused of operating as a cartel and resisting competition, to the detriment of consumers.
The accusation was made by Liquigas, the company that took over Enemalta’s gas distribution and marketing arm in 2008.
But the distributors hit back, denying the cartel claim and accusing the operator of “arrogance”.
The distributors, who are separate from Liquigas, had signed an agreement with Enemalta back in 1992 to distribute cylinders by territory. They are represented by the Chamber for Small and Medium Enterprises (GRTU).
However, Liquigas insisted this agreement was no longer valid as it had been declared null and void by the Office for Fair Competition.
“It is not legally possible for distributors to retain geographical exclusivity as this is in conflict with Maltese competition law and also with EU rules, which specifically prohibit cartels and other agreements that could disrupt unhindered competition and free choice in the EU market,” Liquigas said in a statement.
It is not Liquigas that decides rights or wrongs in this country
It said that five years after acquiring the business from Enemalta, it had respected all its obligations as listed in the agreement signed with the Government in 2008.
However, it was “still waiting for the right to have its own distribution model, so as to ensure the best level and quality of service to customers”.
The distributors, however, are insisting that the 1992 agreement was valid, adding that when Liquigas entered the market in 2008, “an efficient distribution system” had been in place for more than 40 years.
The GRTU said the report issued by the Malta Competition and Consumer Affairs Authority (MCCAA) had not been confirmed and was still pending before the Competition and Consumer Appeals Tribunal in court.
“The territorial exclusivity remains in place, as it is not Liquigas that decides rights or wrongs in this country,” it said.
The GRTU said that in March 2010, Liquigas SpA in Italy was fined €17.1 million for collusion with two other companies for creating a cartel in Sardinia between 1995 and 2005.
It said that in those years, the price of a 12-kilo cylinder had risen to €32 for home delivery.
“The assertion that there is a GRTU-backed cartel is unconfirmed by the competent tribunal and therefore unfounded in fact and in law,” the chamber said, as it held Liquigas responsible for damages sustained.