Authority says gas distributors' price increase not approved

The Malta Resources Authority has said it did not approve an arbitrary price increase in gas cylinders by independent distributors, which was yesterday called into question by LPG bottlers Liquigas.

The MRA said distributors are obliged to sell the LPG at prices established by Liquigas, and that since they act as agents of Liquigas the must maintain the prices issued by the company.

"As agents of the operators the fixed commission paid to distributors must be agreed and approved by the operator as was the case when the pricing mechanism was approved by the authority," the MRA said in a statement.

The Chamber of SMEs (GRTU) is claiming distributors are within their right to increase prices to cover increased costs, and that this is within a pricing mechanism approved by the MRA.

But the authority sad that the mechanism provides for a fixed commission and the distributors are not authorised to increase this fixed commission. "The Authority has, on numerous occasions, informed the distributors that discussions on commissions should be held with the operators and not with the authority," the MRA said.

The GRTU yesterday accused Liquigas of creating an unnecessary conflict with independent gas distributors, after denouncing them publicly for selling gas cylinders above the company's recommended price, without any authorisation.

The company said it would inform the public of the areas where gas was sold at the recommended price.

The GRTU claims the maximum selling price authorised by MRA includes a margin to cover increased costs of distribution and that the prices at which gas cylinders are being sold today by distributors to consumer include this approved margin.