Gas distributors selling cylinders according to MRA’s price mechanism

The Malta Chamber of SMEs (GRTU) is claiming bottled gas manufacturers Liquigas are creating an unncessary conflict with independent gas distributors, by putting them in a bad light.

Liquigas today said that gas distiributors were selling gas 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 authorities and the Office of Fair Trading, have the responsibility of defending the consumer, Liquigas said.

The GRTU however said that while competitors Easygas have reached an agreement with individual distributors as to any cost increases that are effected "within the Malta Resources Authority's established parameters", Liquigas have disregarded the MRA's liquid petroleum and propane gas price mechanism.

The GRTU said the distributors are obliged by social contract to provide door-to-door distribution of gas cylinders, at a price established by the MRA back in June 2010. The mechanism allows for price increases when basic costs of distribution vary. "The maximum selling price authorised by MRA includes a margin to cover increased costs of distribution. The prices at which gas cylinders are being sold today by distributors to consumer include this approved margin."

Liquigas maintains that a number of independent gas distributors have created a cartel that prevent the functioning of a competitive, free market.

But the GRTU says the costings by distributors are within the MRA parameters. "Liquigas have always sold their cylinders according to the maximum price established by the MRA until Easygas came along with a cheaper price. The competitive structure of the market forced Liquigas to reduce its recommended price to consumers."

The GRTU added that when Liquigas changed its recommended price, it failed to make provision for the increase in fuel and wages for gas distributors. "GRTU appeals to Liquigas to meet distributors and settle the issue through proper regulatory channels and not through uncalled-for public announcements."