Door-to-door gas distribution no longer of ‘general economic interest’

Door-to-door distribution of gas cylinders is no longer being considered of general economic interest, according to a notice in the government gazette.

The notice states that door-to-door delivery to end consumers is no longer considered by the government to be of general economic interest, and so the 2014 entrustment of the service to distributors has been terminated.

In May 2014, the government imposed a 15-year public service obligation that saw it subsidise gas distributors to ensure that they serve remote areas.

The government had argued that Malta had an above-average energy poverty when compared with the EU average and that end consumers had no access to a distribution grid, depending primarily on door-to-door distribution of gas cylinders.

Because of this, the government deemed the sector to be of “general economic interest”, an exception to EU rules that forbid State aid.

At the time, Liquigas had already been providing a door-to-door distribution service free of charge. However, the former Malta Resources Authority had argued a year prior that distribution activities should be separate from production and supply activities to allow unrestricted access to new market entrants.

The MRA had held a public consultation the matter, arguing that a supplier like Liquigas, that enjoys dominance in a two-player market of gas importants, had disproportionate control over the value chain of distribution.

The MRA said that without independent distributors, Liquigas would have less of an incentive to invest adequately in its own distribution networks, and further reinforce the barrier to new market operators.