Fuel imports rise as marking system curbs smugglers
Stabroek News
April 23, 2004
Legal fuel in the system (as recorded by the chemical marking system) has increased by almost 40% since October last year.
The level of fuel marked by the Guyana Energy Agency (GEA) has jumped by 40% from 31 million litres in October, 2003 to 43.7 million litres by March 4, 2004 and head of GEA, Joseph O'Lall, feels that the latest figures will mean a curbing of illegal fuel imports.
"The system has been effective, very effective," O'Lall told Stabroek Business on Wednesday. When compared with imports of fuel from January to December, the marked fuel between October and March 4 shows a fluctuating trend. But O'Lall notes that the figures in the previous period were supplied to GEA, while the marked fuel provides authentic figures which can be relied upon. (Bar chart on page 1B shows the trend in marked fuel. The table at far right shows the movement in marked fuel as of February 4 and March 4, 2004.)
The table shows that imports for Guyoil at March 4 jumped by two million litres, by five million litres for Omai Gold Mines Limited, a million each for Esso and Shell and by about three million litres for Texaco. O'Lall says while companies, especially Guyoil has been saying that illegal fuel imports have been hampering their sales and could account for the increase in output, checks are still being made to ascertain the reason for the surges, especially the five million litres by Omai.
While the agency believes it is reining in illegal imports, one of the areas in which it has faltered has been going after the list of known fuel smugglers, a few of whom were caught with illegal imports after the marking system began in October. But the agency has been handicapped without the necessary legislation to give it the teeth to bite.
The amendment to the GEA Act, which provides for a year jail term on conviction, a fine of $3 million and revocation of importer's licences, was passed recently but is still to be assented to. Regulations to accompany the act are also still to be promulgated.
O'Lall says all he has been able to do in the interim is warn those caught in the act that the next time they are found with illegal fuel they will face prosecution. Prime Minister Sam Hinds, with responsibility for energy, is overseas and could not be reached to say when the bill would be assented to or regulations promulgated.
Asked what explanation there is for the surge in the amount of fuel marked, O'Lall contends it is clearly linked to a curb in smuggling and insists that he now has contacts in places to know when a vessel is in the Essequibo or is on its way in with smuggled fuel.
"We know who the smugglers are and as soon as the bill is assented to we intend to go after them," O'Lall asserts.
Asked about reports that fuel was found with only one marker, whereas it should have more than one marker, O'Lall said this has been put down to an aberration in the system rather than an infiltration of the system by smugglers.
As it is, four types of chemical markers are used to make the system foolproof. A company marker (Shell, Esso, Texaco, Guyoil, Aroaima Bauxite Company, Esso for Omai, Guyana Power and Light, Bermine and Linmine); a separate marker for kero, diesel or gasoline; a marker for the concentration of these petroleum products and a rebate marker for duty-free fuel. O'Lall threatens that even if someone is found with a quarter of a pint of illegal fuel he will face prosecution and will be taken out of business.
The GEA has begun a process of regularising the licensing system under the new law but needs the bill to be assented to before it could process the applications.
The illegal fuel trade is estimated at US$30M, costing the treasury $2B in taxes but the government has begun the chemical marking exercise costing US$750 000 per annum and borne by consumers.
However, duty-free fuel importers, including Omai Gold Mines Limited have been exempt from paying the surcharge per gallon of fuel to meet that cost.
Table at right shows the increase in marked fuel in litres per operator as of February 4 and March 4, 2004.