The financial implications of upgrading Maltese fuel service stations to European Union standards

Abstract

Maltese Fuel Service Stations operate with equipment that has been installed when they were primarily setup some 30 to 50 years ago. This equipment is outdated, particularly when concerning health and safety, and protection of the environment. This dissertation primarily focuses on the present situation, particularly analysing the hazards associated with fuel emission. Attention is then directed to a study of the requirements of the various directives, policies and guidelines (particularly EU directives) issued by a number of authoritative bodies to rectify the precarious situation in fuel service stations. The capital and operational expenditure to be incurred to bring the average fuel service station to EU standards in quantified. Following this, an analysis of the financial implications is carried out. The situation needs to be addressed in the very near future. To upgrade, the average Maltese fuel service station has to incur a considerable amount of expenditure. It is very unlikely that finance can be provided from internal funds. Finance from external sources needs to be adequately considered otherwise the upgrading would cause a large financial burden that not all stations are capable of handling. Financial assistance could primarily be given from the Government. However, there are some methods of financing, particularly finance leasing, which should be developed more in the country. Such a method could be the ideal way to finance the upgrading of Maltese fuel service stations, without transferring the burden ofrestructuring on other parties (particularly Government).