The competition watchdog has found there may be a case for action to be taken over a complaint made a year ago that a cartel was operating in the sale of fuel at the pumps.
Consequently, in the wake of a 12-month probe into the complaint, the Malta Competition and Consumer Affairs Authority has initiated “infringement” proceedings, with a final decision to be taken by the director general.
The complaint had been raised by the owner of a Rabat petrol station, who had been planning to cut the price at which he sold diesel by 2c. However, he then scrapped the plan, claiming his supplier had pressured him into doing so.
The authority launched an investigation and last September, an MCCAA spokesman had said it would be closed in a matter of days. After that, however, now further announcements were made.
Pressed by the Times of Malta to reveal the outcome of the probe, the authority said it had issued a “Statement of Objections” in January in line with the law regulating alleged infringements of competition rules.
The spokesman said this procedure kicked in whenever there was a “proposed infringement decision” under the Competition Act. The MCCAA then informs the parties concerned of the objections raised against them.
It does not necessarily lead to an infringement decision
However, the identities of the involved parties in this case were not divulged to this newspaper.
The final decision on whether there has been an infringement of competition law is taken by the Director General of the Office for Competition.
“This is a provisional decision which does not bind the director general and does not necessarily lead to an infringement decision,” the spokesman said.
The final decision is issued after all evidence provided by the parties is taken into consideration, including written and oral submissions. Until then no further information on this case could be divulged, the authority said.
In January last year, Rabat fuel station owner Mario Camilleri had announced a 2c price cut on the price of the San Lucian diesel supplied by the Falzon Group, in the wake of complaints that Maltese consumers were being overcharged.
However, his plan hit a snag. He claimed that Falzon Group owner Joe Falzon had told him to reverse the decision or else miss out on the higher profit margin he had been awarded. The supplier insisted that all fuel stations were free to sell fuel at whatever price they deemed fit. This statement was echoed by the Energy Ministry who had said that all operators in the Maltese fuel market were free to compete in terms of price.
The Maltese fuel market was liberalised in 2007 but price competition at the pumps has not yet materialised – both petrol and diesel are being sold at the rate established by government’s fuel importation company, Enemed.
While in the petrol sector Enemed enjoys a complete monopoly, there are a handful of private importers in the diesel sector.
However, the lack of storage facilities is hindering these private operators from mounting a serious challenge to Enemed’s monopoly.