Gas distribution liberalisation led to exorbitant prices - GRTU

Prime Minister Lawrence Gonzi was yesterday faced by GRTU members and gas distributors protesting over the current impasse in gas distribution.

The GRTU said there is a legal contract that bound Enemalta and the Malta Resources Authority to provide for individual gas distributors across each locality in Malta.

Over the past few weeks, gas distributors have protest a decision to allow the two LPG producers Liquigas and Easygas, to distribute the gas cylinders themselves. Liquigas took over Enemalta’s gas division in 2008.

The retail licence means that Liquigas and Easygas can sell bottled gas themselves without making use of the gas distributors’ services. This would also place both companies in direct competition with the distributors.

In a statement, GRTU said it is the consumer who is suffering the most from the “whole confusion” of privatising and liberalising the sector and accused government of wanting to remove its subsidies too fast.

“It is not true that government was obliged to liberalise retailing in the small localities,” GRTU said. “There are enough arguments to see the multiflag system – one vehicle providing different cylinders – operating in these localities.”

“We are convinced that all this confusion arose from the existing confusion between government entities: their job was to see that all necessary consultation takes place before any stupid decisions are made.”

“Because Enemalta - now Liquigas - is no longer the importer, the ones to suffer are the consumers who are paying higher prices.”

Consumers are now paying an increase between €5.40 to €16.50, “a phenomenal increase of 205%” the GRTU said.

Taxpayers are now paying over €20 million to buy the cylinders. “People used to pay €6.5 million for the same amount of cylinders,” GRTU said, adding that government never gave full details on how much subsidy it used to pay for each 12kg cylinder.

The Chamber of SMEs accused government of dragging its feet because it “was afraid of the big operator who seemed to be able to dictate.”

“We believe this saga will follow the steps of Arriva: haste and extra cost to ruin a system which works and has been working for the last 50 years. The new system is designed by pen pushers and it will not work.”

GRTU said the Maltese needed an efficient door-to-door service but the change led to higher prices because the gas producer wants to generate profit.

Referring to the gas distributors, GRTU said their livelihood is being put in danger: “We understand that there are people in government who are decided to ruin these people’s lives. The Prime Minister has always denied this and that is why Dr Gonzi needs to address this problem.”