Over €2 million in subsidy to gas distributors for duplicate service

Taxpayers have so far forked out more than €2 million in subsidies for a select group of door-to-door gas vendors under a 2014 concession agreement, even though the service is already provided for free by Liquigas.

Known as a public service obligation, the 15-year concession was granted by the government on the eve of the 2014 European Parliament election. It allows 31 vendors to claim compensation, at 13c3 per kilo, if they suffer a drop in sales below the base level, which is set at that of 2013.

The deal was justified on the ground that delivery of gas to certain remote areas of the island is not economically viable.

A fortnight before the signing, gas vendors had staged a protest demanding compensation for the losses incurred due to the termination of a long-standing territorial exclusivity agreement. This agreement had been declared null by the competition watchdog as it breached competition law.

The government’s decision to award subsidies to the vendors had raised eyebrows. Many questioned the need for such a mechanism when Liquigas (a joint venture between Liquigas S.p.A. of Italy and Multigas Ltd of Malta) which bottles and distributes LPG, makes door-to-door deliveries...