The Malta Independent 18 November 2018, Sunday

Partit Demokratiku leader asks EU Commissioner to investigate Enemed's 'fuel supply monopoly'

Saturday, 3 March 2018, 10:42 Last update: about 10 months ago

Partit Demokratiku Leader Anthony Buttigieg wrote to the European Commissioner for Competition Margrethe Vestager, asking her to investigate "the almost absolute monopoly over fuel supplies that Enemed holds in Malta and the detriment this may have to fuel prices and to the consumers on the island."

In his letter, Buttigieg writes: "State-owned Enemed Company Limited is the only company in Malta that is currently importing, storing and selling petrol in Malta. Therefore, the state of monopoly is still in existence. The infringement of Article 31 of the EC Treaty, which gave rise to the opening of an infringement procedure against Malta 10 years ago, is now Article 37 of the Treaty on the Functioning of the European Union (TFEU). "

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"According to this Article, 'Member States shall adjust any State monopolies of a commercial character so as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States'."

"Article 37 of TFEU is still being breached in Malta. Unlike consumers in other Member States, Maltese consumers have no choice, and no idea what brand of petrol or diesel they are purchasing. The price of petrol and diesel is exactly the same in the whole island."

In his letter, he highlights that the Government of Malta or its state-owned companies own practically all the storage facilities for the local market in Malta. "This means that in Malta there is a de facto monopoly, if not de jure. Unless the state owner of these storage facilities is prepared to allow its competitors to use these facilities at reasonable prices, this Enemed Company Limited will continue to enjoy a de facto monopoly. In no other EU Member State is such a perverse situation of market distortion prevalent."

"How can the local representatives of the foreign oil companies compete with Enemed itself when it owns the storage facilities? Enemed can change the storage fees at will. There is no security of tenure. Enemed could terminate the storage leases at will. This has a deleterious effect on natural market-driven FDI as representatives of the foreign oil companies are unable to plan their marketing strategies under these prevailing circumstances."

Turning to diesel, he states: "there are only two minor importers of diesel in Malta for the local market in addition to Enemed, which still enjoys its dominant position in the market. But the price of diesel in Malta, like that of petrol, is fixed by the Government and announced during the Budget Speeches or other ad hoc press conferences. The price of diesel in Malta is exactly the same in the whole island, including that sold by the minor importers. Even so, this would be tantamount to a price-fixing cartel in any case. So where is the competition?"

 

 

 


 

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