Governments have come and governments have gone and Malta became an EU member state but the situation has hardly changed, save for the hiving off of Enemalta’s Petroleum division.
The issue about the virtual monopoly enjoyed by Enemed Ltd – the state company that replaced the Petroleum Division of the old Enemalta Corporation – in the importation of fuel to Malta has been flagged again.
This time it was the Partit Demokratiku (PD) that entered the fray.
About two weeks ago, PD leader Anthony Buttigieg wrote to the European Commissioner for Competition, Margarethe Vestager, and asked 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 consumers on the island.’
It is indeed incredible that the country has not been able – or willing – to check the state monopoly in the importation and distribution of fuel that was set up by the Mintoff regime some forty years ago when the three fuel-importing companies – Shell, Esso and BP – were summarily sent packing home with a typical Mintoffian excuse.
Since then, governments have come and governments have gone and Malta became an EU member state. However, the situation has hardly changed, save for the recent hiving off of Enemalta’s Petroleum division leading to the setting up of Enemed – a new company, wholly owned by the state – plus other separate state-owned entities that now own the fuelling storage facilities.
It seems that successive governments found the income from the fuel importation business was too lucrative to allow – in practice – the private sector to enter into the market.
Today, Malta is the only EU member state where the importation of fuel is practically nationalised and bereft of any competition, with the state deciding what the price of petrol and diesel for the consumer should be.
Plans initiated by the PN government to privatise what was then Enemalta’s Petroleum Division seem to have vanished into thin air and the situation has practically remained as set up by the Mintoff regime so many moons ago.
In his letter to Vestager, the PD leader claimed that Article 37 of the Treaty on the functioning of the European Union (TFEU) obliges member states to ‘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’.
Buttigieg correctly argued that ‘unlike consumers in other member states, Maltese consumers have no choice and no idea what brand of petrol or diesel they are purchasing.’
The PD leader also insisted that this monopoly is further strengthened by the fact that Government-owned companies own practically all the storage facilities for the local market.
It seems that successive governments found that income from the fuel importation business was too lucrative to allow the private sector to enter the market.
The letter sent by the PD followed a series of parliamentary questions tabled by Godfrey Farrugia – an Opposition MP said to be representing the PD – to the Minister for Energy and Water Management, Joe Mizzi. According to the Minister, following a complaint made by a Maltese citizen, the EU had concluded that in the current situation there is no breach of Article 37.
In another reply, the Minister assured everybody that the petrol distributed by Enemed is in line with international standards i.e. according to European Norm 228 (EN228) that establishes the quality of petrol that can be sold to consumers.
The Minister refused to divulge the name of the supplier of fuel who won the tender for fuel issued on January this year because of commercial considerations.
From the Minister’s replies one can glean that it could well be that the current situation is not technically in breach of article 37 of TFEU.
I speculate that for this to happen there must be a case where a would-be private importer and distributer of fuel – in competition with Enemed – is refused the use of state-owned storage facilities or is asked prohibitive rates for such use.
Is the ball in the court of the private sector, after all? Or is the prospect of a legal battle with the state – plus the possible complications resulting from the lack of co-operation from petrol station owners – too daunting for anyone to challenge Enemed’s monopoly?