Alfred A. Farrugia
The European Commission published the consumer prices of petroleum products inclusive of duties and taxes as of 8 December 2014.
It can be seen very clearly that the price of both unleaded petrol (€1.44 per litre) and diesel (€1.36) in Malta are higher than the EU-weighted average of €1.418 and €1.292, respectively, of the 28 European Union member states.
This means that even when the price of unleaded petrol and diesel is reduced in January, as announced in the Budget Speech, it will still be higher than the current average prices in Europe.
The European Commission points out that the "weighted average" is the "average resulting from weighting of the quantities consumed during the year 2012". The price of unleaded petrol and diesel in Malta has been higher than the arithmetical average of the consumer prices in Europe for a number of weeks, if not months.
From where is Enemalta or Enemed importing these petroleum products? Why can they not import from sources where they are less expensive, as other countries seem to be doing? What is the margin of profit of Enemalta or Enemed?
There are 21 EU member states in which the price of unleaded petrol is less than Malta, namely Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, France, Germany, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
In the case of diesel, there are 23 EU member states where the price is less than Malta because, in addition to the above list, in Denmark, Greece and the Netherlands the price of diesel is also less than in Malta, while in Sweden it is higher.
If Enemalta or Enemed are not in a position to procure petroleum products at lower rates, why are other importers or representatives of foreign oil companies not coming forward to provide their products and services in Malta? Do we have a level playing field?
Authorisations
How many trading licences or authorisations have been applied for or issued to market participants other than the state monopoly Enemalta or Enemed since 18 December 2007? On that date, Competition Commissioner Neelie Kroes said: "I am pleased that, after some hesitation, Malta has decided to open its fuel market to competition. Malta made the commitment to create a level playing field in this important market when it joined the European Union, and I look forward to seeing the benefits competition will bring - ultimately to the benefits of Maltese consumers."
What happened to that commitment? Why did the European Commission (Competition) close the infringement procedure before that commitment was implemented, not only in a legal notice, but also in practice?
Why is it that Legal Notice 278 of 2007 has not brought about any difference on the ground? Where are the petroleum service stations offering different brands of unleaded petrol and diesel?
According to the Second Schedule, Regulation 11(2) of Subsidiary Legislation 423.28 of 2 October 2007, importers have to pay an authorization fee of €2,329 every year, and €0.00175 per litre of imported fuel.
Are there not enough duties and taxes on the imported fuel? Why does the government need to take a commission on every litre of fuel imported? Is this a normal EU competition practice?
Section 13 (i) of the same legislation refers to "the possibility of a monopolistic or an oligopolistic condition in the inland wholesale petroleum market, detrimental to the public interest being created or aggravated, and the extent to which fair and reasonable competition in the retail of petroleum could be affected."
Has this not applied to Enemalta since 2007, and does it not apply to Enemed at present? How can this situation be permitted by the authorities? Is the present situation in compliance with the EU Treaty? Is the European Commission (Competition) satisfied that the fuel market in Malta is really open to competition, and not solely on paper?
On 13 October 2006, the European Commission (Competition) opened an infringement procedure against Malta for maintaining import monopoly for petroleum products.
The Malta Automobile Club has written to the European Commission to find out how many trading licences have been issued in Malta since December 2007, and in what way the situation in Malta at present is different from that of 2006.
Also see:
http://ec.europa.eu/energy/observatory/oil/doc/prices/bulletin_with_taxes/2014_12_08_with_taxes_1732.pdf
http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lp&itemid=20270&l=1
http://mra.org.mt/wp-content/uploads/2012/08/28.Petroleum-for-the-Inland-Wholesale-Fuel-Market-Bottling-of-LPG-and-Primary-Storage-Facilities-Regulations.pdf
http://europa.eu/rapid/press-release_IP-06-1391_en.htm?locale=en
https://www.facebook.com/pages/Malta-Automobile-Club/484683321570286