Georgetown: Prior to 2003, non-taxed fuel was being smuggled into the country and sold illegally to retail sites while taxed road fuels were being tainted with low-tax kerosene.
With no means of identifying which fuels were legally imported and which were smuggled, and recognising the ruinous effect of fuel smuggling on legitimate businesses, the government of Guyana implemented the Fuel Marking Programme (FMP) in 2003.
Convictions
Following the implementation of the programme, the conviction rate, representing a total of 26 convictions to date, has dramatically increased and will continue to increase in years to come.
For the year 2013, there were 35 incidents of illegal fuel and 13 prosecutions continuing before the Magistrates’ Courts in Guyana. Two convictions along with one dismissal were recorded for the year.
The preceding would not have been possible without the partnership and support of other agencies. In 2007, a taskforce on fuel smuggling and contraband was convened under the auspices of the Home Affairs Ministry to coordinate the efforts of the different law enforcement agencies in the fight against fuel smuggling and contraband.
The resulting cooperation between the Guyana Police Force, the Guyana Revenue Authority (GRA), the Guyana Defence Force (GDF) Coast Guard and the Customs Anti-Narcotics Unit (CANU) aided in several interdictions of illegal fuel and assistance in capturing, escorting and securing various transport vessels (both land and water).
Cooperation from the Guyana Police Force in the detention of suspects and the GDF Coast Guard and the GRA in joint operations have proven invaluable in combating the illegal fuel trade.
With the technology being new to Guyana and the region at the time of its introduction, there was need for specialised
The Guyana Energy Agency (GEA) Act 1997 was therefore amended in 2004 to provide specifically for licensing of the different classes of fuel dealers and for the marking of all legitimately imported fuel.
Subsidiary legislation in the form of the Petroleum and Petroleum Products Regulations 2004 was also created to regularise fuel operations. The act was further amended in 2005, and again in 2011, after a review of the system revealed deficiencies.
The FMP was charged with the responsibility of ensuring that all gasoline, diesel and kerosene were properly ‘marked’ at a known concentration at all legitimate import points and also collecting and testing samples of fuel from various parts of the country including wholesalers, retailers, distributors, transporters, commercial consumers and any person in possession of fuel for the relevant marker(s).
The marking process involves adding a mixture of marker chemicals in liquid form to legally imported fuel before it is released for use or sale. At the time of its implementation, this was done manually.
Bolstered
However, the FMP was bolstered in 2010 with the addition of a mechanised system to add the chemical marker into the bulk storage tanks.
This bulk marking system utilises self-powered injectors to automatically inject the chemical marker concentrate during discharge of fuel from the international vessels into the bulk storage tanks.
“This system of bulk marking has improved security and integrity by taking the domestic marker out of the hands of the marking staff where ‘losses’ have been experienced in the past… the change from manual to mechanical marking further enhanced the programme whilst minimising impact on terminal operations,” said GEA Chief Executive Officer, Dr Mahender Sharma.
In addition to fuel related tax losses and the negative effect on legitimate businesses, illegally smuggled fuel can also affect consumers owing to the fact that usually, the illegal fuel that comes into the country is of a poorer grade than the legal one.
“We have found that often the illegal fuel is smuggled in dirty containers and it is exposed to salt water (sea water) which causes it to become contaminated.
“The use of contaminated fuel damages equipment…contaminated fuel can cause damage to fuel pumps, cause injectors to become blocked, damage fuel filters and spark plugs,” said Dr Sharma.
The issue of fuel adulteration not only covers evasion of taxes on fuel, but also encompasses instances where tax-free fuel is being utilised for unauthorised purposes.
In this regard, the programme has had tremendous success. Analysis of the laboratory results of samples collected from various sites from 2007 to 2012 revealed that there was a reduction in the number of sites found with adulterated/illegal fuel.
Drastic decline
For the years 2007 to 2010, there was a continuous increase in the number of incidents of illegal fuel being found at inspected sites.
The numbers, however, dramatically decreased in 2011 and 2012, with 2011 recording a 60 per cent decrease from 2010 and 2012, recording a 38 per cent decrease from 2011.
This was despite there being an increase in the number of sites being sampled annually.
This consistent reduction of numbers prompted internal investigations after which, due to lack of confidence in their ability to carry out their duty, several employees’ services were terminated in accordance with their contracts.
Following this, incidents of illegal fuel being found increased by 169 per cent from 2012 to 2013, again with more sites being sampled than previous years.
The GEA Act creates various offences penalising the possession of or general dealings with fuel smuggling.
Those offences include being in possession of, storing, purchasing, transporting, and selling illegal petroleum. Owing to the fact that legislation of this nature was new to the region, restrictions in the initial definition of illegal petroleum, the lack of equipment to scientifically determine the type of fuel found to be illegal, among others, hampered the agency’s ability to successfully prosecute persons found with illegal fuel.
Additionally, in some instances charges were filed after the statutory limitation period had expired causing the matters to be struck out.
Having addressed such issues, the conviction rate significantly increased in 2012, a year in which 15 convictions were recorded.
You must be logged in to post a comment.