A fuel station owner slapped by the competition watchdog for revoking a diesel price cut, has called for a ban on the existing practice whereby importers are setting an identical price thus denying customers a fair deal.
The owner of M&N Camilleri Petrol Station of Rabat made this appeal in reaction to the decision delivered two days ago by the Office for Competition following an investigation launched in January last year.
Back then, station owner Mario Camilleri scrapped a plan to reduce the price of diesel by 2c a litre, claiming undue pressure from his supplier San Lucian oil Company Ltd, a member of the Falzon Group Holdings Ltd.
The latter threatened to withdraw the station’s increased profit margin if Mr Camilleri did not retain the higher pricing.
In its decision, the watchdog commended the station owner for taking the initiative to lower the price but pointed out that he should not have given in to the supplier’s demand and “agreed” to reinstate the old price. Such a practice violated competition law, the watchdog said.
Asked if he would be appealing the decision, Mr Camilleri yesterday said he had no such intention.
“My ultimate wish has always been for diesel importers to battle it out among themselves on who may offer the best price to consumers,” he said.
“It seems there is an understanding among suppliers whereby the two private ones follow the prices set by the State-owned Enemed, thus killing any prospect of competition. Such practice should be banned as otherwise customers will never profit from a liberalised market,” Mr Camilleri added.
Questioned if he was mulling to take another chance and lower the diesel price again, he said that in hindsight such move could not succeed unless there was a real competitive market at suppliers’ level.
This newspaper yesterday sought the views of the two privately owned importers but none of them were forthcoming. A spokesman for International Fuel Suppliers declined to comment ,saying this was “commercially sensitive” information.
By the time of writing, the Falzon Group did not reply when asked if they were considering lowering the price and if they were appealing the watchdog’s ruling.
In its decision, the Office said that both the supplier and the fuel station owner had participated in an agreement whose aim was to restrict and distort the market, in breach of the Competition Act.
However, the Office said it would not impose any administrative fine on the station, as it did not want to “deter any future initiatives from other retailers in a similar situation… which initiatives would have the ultimate goal of benefiting consumers”.
On the other hand, it had a much more critical evaluation of the supplier’s conduct, saying it wanted to inflict a fine.
However, such sanction was not possible, by virtue of a recent Constitutional Court judgment which said that the Director General for Competition could not decide cases of alleged breach of rules and impose fines, as such powers were only vested to a proper court.