Fabian Demicoli

Gas Distributors:GRTU’s position following 24.12.10 OFC’s Decision

 Liquigas as successors at law of Enemalta Corporation in all fields related to gas production, purchase, sale and distribution is contractually legally committed by individual contracts with each individual gas distributors. As a result of these contracts Liquigas has conceded to each individual gas distributor the rights of Liquigas as per sale and distribution Licences issued to Liquigas by MRA (and Enemalta Corporation as predecessors in title) in each territory conceded under contract to each gas distributor.

 

To strengthen the position of each distributor the Enemalta Corporation, as the then Licensing Authority, also issued to each individual gas distributor an operating Licence also "renewable automatically every year" so that each individual gas distributor is not dependent on the management in his territory of the licence applicable to Enemalta (and therefore its successor Liquigas) but can operate  also as an independent licensee on the basis of his operating Licence incorporating the territory to which his licence is applicable This Licence is issued in terms of the contractual obligation binding the Licensing Authority.

The decision of the Office for Fair Competition of December 24th, 2011 in no way alters the validity and contractual obligations of the parties. The decision of OFC declared however that:

Liquigas are to "cease and desist immediately from imposing any exclusive purchase/distribution obligation on any individual gas distributor in the execution of his obligations " under the contract.

Liquigas "with immediate effect and unconditionally supplies distributors with gas cylinders in order to avoid consumer harm."

Indeed GRTU contends that the MRA is obliged to ensure that no action whatsoever is effected by Liquigas, or any other supplier that may enter the distribution market, that may be deemed to be in breach of the contractual obligations entered into in 1992 or be deemed in contempt of the OFC's decision 24th December 2010.

GRTU on behalf of Gas Distributors is committed to enter   into bilateral discussions with Liquigas as soon as it is convenient for Liquigas so that the practical arrangements as to how to implement the decision of OFC with the least inconvenience to Liquigas and to consumers and commercial users are agreed and to ensure that each Gas Distributor continues to abide by the concessionary rights awarded to him by the contract of 1992 and to revive the Board of Discipline mentioned in Article 16 that  provide for a statutory grievance procedure mechanism.

GRTU on behalf of the Gas Distributors is currently in discussions with Easygas to agree on the terms of sale and distribution of Easygas cylinders.  Currently no agreement exists with Easygas as GRTU prudently awaits conclusion of additional arrangements with their contractual partners Liquigas, however in the absence of more detailed structural arrangements approved by MRA action has been taken to implement the OFC decision as follows:

Easy gas will provide cages to gas distributors so Easygas cylinders are clearly identifiable

Easygas will provide each gas distributor with at least 35 cylinders, comprising different sizes, and first provision is on free credit basis and payment effected on first replacement by gas distributors of cylinders sold to consumers and for which payment by consumers has been effected.

The service offered  until  further arrangements is:

Sale of new Easygas service on a deposit of Euro25 and appropriate Easygas deposit receipt.

Replacement of Liquigas cylinder with Easygas cylinder at no charge provided customer provides LiquigasEnemalta deposit receipt and Gas Distributor provides new Easygas receipt for €25.

Withdrawal of Liquigas cylinder and replacement with Easygas upon payment of €20 in cases where customer does not provide receipts and issue by gas distributor of Easygas deposit receipt for €25 (Liquigas exchanges gas cylinders for only €5 when no receipt is available, this as Company policy). Deposit applies the same for all sizes of cylinders.

Other arrangements will be entered into once relations on a tri-partite basis Liquigas, Easygas and GRTUGas Distributors get moving in a structured form leading to a ‘clearing-house" arrangement.

Liquigas must retain its obligation to accept return of cylinders either on production of receipt and payment of €25 or no receipt for the lower €5 whether return is made directly by consumers or by gas distributors.

GRTU accepts Government declared policy announced on 24th December 2010 in favour of a unique sole system of trucking in the distribution of gas cylinders in localities and this for environmental, social and traffic management criteria.

GRTU contends that  MRA as a contractual party to the 1992 is obliged to ensure that neither Liquigas nor Easygas  abuse of their licence to hamper Gas Distributors in the rights and concessionary territory under their care through the provision by either supplier of new trucking/delivery services in competition with the service offered by gas distributors for as long as the distributors abide the terms of their contractual obligations.

GRTU will make all endeavors possible to ensure an early upgrade of the current distribution system in the localities for the greater satisfaction of consumers and commercial users.

GRTU appreciates the involvement of the authorities to ensure that an efficient and friction-free system of gas distribution in the Localities that further upgrades the current contractually established system is agreed to as early as possible.

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