Dear Editor,
I refer to the editorial which appeared in the June 22, 2010 edition of the Stabroek News. The editorial in question was entitled ‘Cocaine in… cocaine out.’ GEA is herein seeking an opportunity to provide the public with some information regarding the government’s ongoing struggle against fuel smuggling.
The government recognized the ruinous effects of fuel smuggling on legitimate businesses and in 2003 installed the fuel-marking programme using state-of-the-art covert technology as a means of identifying illegal fuel. At the time, this technology was new to Guyana and the region. Special legislation had to be drafted to facilitate the programme. As a result the GEA Act was amended in 2004 to provide for licensing of the different classes of fuel dealers and for the marking of all legitimately imported fuel. A review of the system revealed certain deficiencies which resulted in the GEA Act being amended in 2005.
GEA has been working indefatigably towards improving both the system and the human resource element, and is encouraged by the steady development of the various enforcement activities. This is manifested in the fact that when the system came into being in 2004, smuggled fuel had been at a rate in excess of 30%. By the end of 2009, that figure was down drastically to less than 10%. Achieving this feat has been no easy task. Many hurdles have had to be overcome and are still being overcome.
Some of the first cases prosecuted under the legislation revealed that the system required additional testing capabilities. As a result, equipment to perform these additional tests had to be sourced and same was only achieved in 2009. On a number of occasions GEA has had to terminate staff where events demonstrated leaks in the system, which in itself hampered GEA’s ability to provide sufficient coverage of the length and breadth of Guyana. The issue of smuggled fuel not only covers evasion of taxes on fuel, but also encompasses instances where tax-free fuel is being utilized for unauthorized purposes.
There are several indicators that GEA’s enforcement activities have been yielding fruit. For example, the total volume of petroleum products legitimately imported in 2009 was 3,871,685 barrels compared to 3,727,410 barrels in 2008. The table below shows that in 2009 there was much progress in the sampling of a diverse number of sites. 1,202 sites were sampled at least once compared to 592 for the previous year. 73 (or 6%) of the 1,202 sites sampled were found with significant dilution (defined as more than 50%) in at least one tank.
2004 2005 2006 2007 2008 2009
No of Sites 573 763 656 566 592 1,202
sampled at
least once
No of Sites 72 240 220 128 57 73
found with
significant
dilution in at
least 1 tank.
% of Sites 13% 31% 34% 23% 10% 6%
found with
significant
dilution in
at least 1 tank.
There was therefore an increase in the detection of illegal fuel. The increased detection is also correlated with an increase in the number of samples collected, number of sites visited and number of analyses conducted. From 2006 to 2009, the percentage of sites found with significant dilution in at least one tank has progressively decreased from 34% in 2006 to 6% in 2009.
The various experiences of the Fuel Marking Programme indicate that some extreme measures are being adopted to covertly transport, store and sell illegal fuel. One can infer that these extreme measures are indicative of the effectiveness of the fuel marking technology in identifying illegal fuel; inherent fear of the technology; fear of detection; and fear of prosecution.
As testimony to government’s commitment to stamping out the scourge of smuggling, in 2007, a Task Force on Fuel Smuggling and Contraband was convened to coordinate the efforts of the different law enforcement agencies in the fight against fuel smuggling and contraband. Cooperation between the Guyana Police Force, Guyana Revenue Authority, Guyana Defence Force Coast Guard, and Customs Anti Narcotics Unit (CANU) has resulted in several interdictions of illegal fuel and assistance in capturing, escorting and securing various transport vessels (both land and water). Cooperation from the Police Force in the detention of prisoners and the GDF Coast Guard in securing vessels proved invaluable in combating the illegal fuel trade, since GEA’s lack of capacity to traverse the waterways had previously been a hindrance to interdiction. GEA is therefore grateful to its sister agencies and the work of the task force in providing support facilities in this regard.
Reports by public-spirited citizens have also contributed to significant interdictions. GEA wishes to express gratitude to such persons and encourage them to keep reporting any suspicious fuel activities to the agency.
This increased detection together with increased testing capabilities and the addressing of legislative hurdles have all culminated in greater productivity. While in 2008 only three new charges had been filed, seven new charges were filed in 2009. A second conviction under the GEA legislation was achieved in 2009 when a trawler owner whose trawler had been intercepted in 2008 with a large quantity of illegal fuel had opted to plead guilty and was convicted of possession of illegal fuel.
From January to May 31, 2010 the agency has already filed charges in respect of fourteen new matters.
Thus, GEA wishes to assure the public that while it is not in the habit of sensationalizing its enforcement activities, aggressive efforts are being pursued against fuel smuggling. So it is not true to say that “…there is little enforcement action against fuel smuggling that supports much of this country’s lawless mining activities in the hinterland…”
In conclusion, GEA would like to implore the media to join in encouraging the public to support the GEA and other agencies in the war against smuggled fuel rather than rushing to cry “non-enforcement.”
Yours faithfully,
Mahender Sharma
Chief Executive Officer (ag)
Guyana Energy Agency
