Changes proposed to original plans

The liberalisation of the inland fuel market has been delayed by at least three months as the government and the regulator review "particular proposals for changes to the original plans and proposed policy".

Asked to elaborate, a spokesman for the Ministry of Resources and the Infrastructure, under whose wing the Malta Resources Authority falls, would not comment. Four days prior to the planned liberalisation, the government yesterday issued a five-paragraph statement saying the "liberalisation of the inland fuel market has been delayed and is now estimated to occur by the end of March 2006".

The Times reported yesterday that fuel imports liberalisation was expected to be postponed by a few weeks despite the fact that the government had promised the EU it would lift Enemalta's monopoly in the sector by January 1, 2006.

A call for expressions of interest was meant to be issued six months ago.

"Given the importance of this market to the national economy and to consumers, it is considered prudent to consider all new options that will result in a market organisation that will better meet the needs of the country," the official statement said yesterday.

The MRA, which regulates the market, is now expected to issue a consultation paper to inform stakeholders and the public of the proposed changes.

The document should include the draft legislation that will provide the legal framework for liberalisation and the proposed licensing schemes and conditions. MRA officials will also be available for meetings with stakeholders during the consultation period.

Further meetings with stakeholders can also take place after the end of the consultation period, when all the suggestions and responses to the consultation paper will be considered and the final proposals submitted to the government.

All existing operating licences will remain in force until replaced by new ones, the government said. The MRA will be in a position to grant new licences to the various operators "by the beginning of the second quarter of 2006".

Importing energy products needs preparation and prospective importers had to think in terms of storage facilities and make other logistical arrangements. The availability of storage may be the first hurdle to overcome as the March 31 installation in Birzebbuga will be decommissioned.

As a result of liberalisation, owners of service stations will be able to import petrol, LRP and diesel even if they have to be in possession of both a petrol station and wholesaler licence.

Vince Farrugia, director general of the Malta Chamber of Small and Medium Enterprise, GRTU, said liberalisation should not occur overnight and disrupt the present situation where consumers are being well served.

The GRTU represents petrol stations, fuel and gas distributors.

Mr Farrugia said it is good that the government is taking its time to have a proper structure in place before liberalising the market.

"Liberalisation should lead to the service being as good as it is today. Customers are being well served and we do not believe there are cartels in the system," he said.

Energy and petrochemicals giant Shell and the local Falzon Group of Companies are known to have expressed interest in importing fuel when liberalisation takes place.