Fabian Demicoli

Gas distributors sell in conformity with approved Malta Resources Authority price guidelines

 Gas Distributors are abliged according to the Social Contract approved by Governmenmt  to provide door to door distribution of LPG Gas Cylinders everywhere in Malta and Gozo and to the exclusion of no consumer irrispective of distance or any other hindrance. Under this obligation Gas Distributors  are also obliged to sell gas at the price established by the Malta Resources Authority according to a price methodology  established by the same Malta Resources Authority in June 2010. The approved mechanism also provide for price increases necessary when basic costs of distribution vary when taken as a national average.

 

Early in December Gas Distributors, members of GRTU, met Liquigas after Liquigas formally and in writing did not accept to include the costings  presented by Gas Disributors to prove that current price mark-ups do not cover increased costs of distribution. The costings presented by the distributors are within the price methodology as established currently by the Malta Resources Authority. Liquigas have always sold their LPG cylinders according to the maximum price established by the Malta Resources Authority until Easygas Malta Limited came along with a cheaper price. The competitive structure of the market forced Liquigas to reduce also its recommended price to consumers. When competition was absent Liquigas simply held to the maximum price issued by the Malta Resources Authority. It is an obligation under the price settlement mechanism to take into consideration the actual costs of distribution on a door to door basis. The maximum selling price authorised by MRA include a margin to cover also increased cost of distribution. The prices at which Gas cylinders are being sold today by distributors to consumer include this approved margin.

When Liquigas changed its recommended prices the company however failed to meet the increasing costs of distributors like increase in fuel prices and increased wages for themselves as self employed and for their employees in addition to other expenses. The Malta Resources Authority were informed of this situation so that the matter could be managed according to established procedures. This was done during a meeting held at the Authority's offices in December.

The prices at which Distributors are selling to consumers do not exceeded the prices set by the Malta Resources Authority and the statement issued by Liquigas is  therefore incorrect and only represent another miscalculated action by Liquigas to create unnecessary conflict with the gas distributors who serve the community.  GRTU objects strongly to this attitude as it represents a silly way to conduct industrial relations.      Liquigas efforts to place the distributors in a bad light with end consumers reflects badly on Liquigas itself.

Whilst Easy Gas Malta Limited has agreed with individual distributors in respect to any acceptable cost increases effected as long as they are within the MRA established parameters, Liquigas stabornly persist in their desregard of their legal obligation as issued by the Malta Resources Authority in respect to LPG and Propane Price Mechanism (June 2010)' issued by the same Authority.

 

GRTU appeals to Liquigas to meet Gas Distributors representatives and settle this issue through the proper regulatory channels and not through uncalled for public announcements that result only through poor judgment and  are only fruit of their own failure to act according to their obligations and approved procedures.

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