With reference to the letter entitled Unjustified Rise in Price of Gas Bottles by John Barnes (July 16) Liquigas would like to point out a number of facts.

Any serious and responsible business follows established market mechanisms including a reasonable return for shareholders.

Mr Barnes refers to the UK market where the sister company of Liquigas is well established on the market. Contrary to Mr Barnes' impression, in the UK, bottled gas is not "mainly used only by a few people and as a luxury commodity in caravans". Data from our UK counterpart only reveal that it sells 147,000 metric tons per year. This amount is sold in cylinders which in the UK vary from 4kg to 47kg in size, depending on type of usage: heating, cooking and leisure.

With reference to piped networks, one should highlight the fact that piped gas is natural gas (methane) while the bottled product in Malta is liquefied petroleum gas (LPG), being either propane or a mix of propane and butane. Natural gas and LPG are two different products from a technical and geological aspect, and the market logistics and pricing of each product are very different.

Mr Barnes also brought up an unusual argument in the sense that a product or service has to be priced on customers' ability to pay for it.

Normally, it is the cost structure that determines the price of a product. In the case of LPG, this is purchased in dollars on the international market and, in line with safety requirements, it has to be transported from site of production to the various consuming markets, and also stored, filled in cylinders and delivered door to door.

Mr Barnes' comments, if accepted, would lead to a return to a state-subsidised system which the government has decided to discard after some 30 years, in favour of a non-government controlled market as in other EU countries.

In the meantime, the government has also put in place an energy benefit to cushion the price increase impact on a number of low-income families. Incidentally, the Malta Resources Authority has estimated the impact to be less than €30 per family per annum.