Venezuela fuel being traded in border areas with gov’t blessing

– Sharma says supply challenges responsible

Fuel being traded across the border from Venezuela is not being treated as illegal once the supplies are utilised within border areas, Head of the Guyana Energy Agency (GEA) Mahender Sharma has confirmed.

“Government, recognising the challenges in supplying border areas, has allowed border trade along border areas to the west as long as the materials being brought into Guyana are being utilised within the border area,” Sharma said, explaining that fuel is one of those materials.

Recently there has been concerns expressed about the smuggling of fuel across the Guyana/Venezuela border and its presence along the Essequibo Coast and in the North West District.

Sharma, in a correspondence with Stabroek News, answered several questions surrounding these issues, and indicated that the GEA has managed to achieve a significant drop in fuel smuggling.

He explained that when it comes to fuel border trade, this applies to all of Region One (the North West District); down the Cuyuni to below Aranka in Region Seven and sub-Region One of Region eight. He said that currently fuel being supplied from the coast to Region Nine is generally less costly than fuel coming across the Brazilian border. “Government does not consider fuel traded across the border as illegal in the areas mentioned,” he stressed.

Sharma’s explanation offers some clarity on statements made by Prime Minister Samuel Hinds. Hinds had been asked about the presence of illegal fuel in Port Kaituma, a community in Region One and said in response that there was no illegal fuel there. He said that government has been treating Port Kaituma “as a border situation; meaning that things can come across just like at Lethem and other places.”

Asked how big an issue is illegal fuel in Guyana, Sharma told this newspaper that illegal fuel causes loss of revenue from related taxes and also has a negative effect on legitimate businesses.

He explained that prior to 2003, Guyana was facing huge fuel smuggling and associated tax losses. Non-taxed fuel was being smuggled into the country and sold illegally to retail sites while taxed road fuels were being adulterated with untaxed kerosene. He said that with no means of identifying which fuels were legally imported and which were smuggled, and recognizing the ruinous effect of fuel smuggling on legitimate businesses, the Government of Guyana implemented the Fuel Marking Programme (FMP) in 2003. Around this time, according to him, it was believed that one third of the fuel used in Guyana had been smuggled into the country.

Sharma said that with the technology being new to Guyana and the region at the time of its introduction, there was need for specialised legislation. The Guyana Energy Agency 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, he said adding that subsidiary legislation in the form of the Petroleum and Petroleum Products Regulations 2004 was also created to regularise fuel operations.

He went on to explain that 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).

According to him, the constant monitoring and maintenance of the Fuel Marking System’s integrity is absolutely necessary for its continued success.

Significant drop in fuel smuggling

When asked about the source of illegal fuel, Sharma said that while the agency is unsure “one may presume that it originates from neighbouring countries such as Suriname, Trinidad and Tobago and/or Venezuela.”

Asked about the dangers of illegal fuel possession, he cited prosecution. He also said that illegal fuel can affect consumers owing to the fact that usually, the illegal fuel that comes into the country is of a lower quality 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,” he said.

Sharma told Stabroek News that there are also safety concerns attached to having illegal fuel in one’s possession. “In trying to hide an illegal operation, a person may compromise safety to conceal the said operation,” he said.

He said that from 2006 to 2013, the percentage of sites found with significant dilution in at least one tank has progressively decreased from 34% in 2006 to 3% in 2013.

GEA has achieved 29 convictions since the commencement of prosecutions for illegal fuel possession, he said, adding that the success of the FMP, and the fact that since its implementation there has been a significant drop in fuel smuggling, “is testament to the fact that GEA has always strategised about where their presence is needed.”

He also said that the GEA continuously monitors and reassesses its strategy to ascertain whether an impact is being made, or whether there is need for change with the aim of ensuring that fuel smuggling is curtailed.

Asked whether the GEA is engaged in dialogue with other agencies and ministries about illegal fuel, he responded in the affirmative. He explained that in 2007, a Task Force on Fuel Smuggling and Contraband was convened under the auspices of the Ministry of Home Affairs to coordinate the efforts of the different law enforcement agencies in the fight against fuel smuggling and contraband.

He said that the resulting cooperation between the GEA and the Guyana Police Force, the Guyana Revenue Authority, the Guyana Defence Force 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 on land and water.

He said that cooperation from the police in the detention of suspects and the GDF Coast Guard and GRA in joint operations have proven invaluable in combating the illegal fuel trade.

The GEA, it was explained, is also part of the Hinterland Intelligence Committee (HIC) which was organised by the police and is chaired by the Commissioner of Police. Members of this committee include the army, the Civil Aviation Authority, the Guyana Geology and Mines Commission (GGMC), the Guyana Gold and Diamond Miners Association, the GRA, the Association of Aircraft Owners, the Ministry of Health, the Ministry of Local Government, the Guyana Forestry Commission and the Guyana Women Miners Organisation.

According to Sharma, many issues are discussed at monthly meetings of both the Task Force and HIC, including fuel smuggling. He added that the police are usually consulted when there is an emergency or if a tip is received and the GEA usually solicits the support of other enforcement agencies as required.

Asked about the presence of GEA officers in the North West and the Essequibo Coast, he said that the agency has permanent bases at Georgetown, Linden and Essequibo, with more than 20 field officers tasked with testing fuel across the country. To ensure operational integrity and security, he said he could not disclose the number of staff present at these locations.

 Fuel transport guidelines

With regard to the explosion of a fuel boat at Turn Basin, Port Kaituma last month, Stabroek News inquired whether the GEA was conducting any investigation and Sharma said that fires and explosions fall under the purview/responsibility of the Guyana Fire Service and the police.

He said the Guyana Fire Service is preparing a report which will be the basis for discussions amongst relevant government agencies and other stakeholders.

Donald James, a 17-year-old, was pumping fuel from a trawler when the explosion occurred. Several nearby boats and buildings were burnt as was the teen.

Sharma also said officers of the GEA visit the Port Kaituma area twice a year “to learn about what is happening in the area.” He said that the Task Force on Fuel Smuggling and Contraband has also visited in the past.

Asked about the work of the GEA in ensuring that boats meet the required standards for transporting and storing fuel, he explained that a Bulk Transportation Licence from the agency is required if a person is transporting an aggregate quantity of 2,000 litres of petroleum and petroleum products in a vehicle, vessel or boat.

He said that as part of its licensing process for the bulk transportation of fuel in boats/vessels, GEA’s officers conduct an inspection of the facilities and operators are required to submit a Petroleum Licence from the Guyana Fire Service, a Maritime Administration Department (MARAD) Inspection Certificate, a Captain’s Licence and Vessel’s Licence

“GEA continuously monitors and evaluates its strategies and procedures,” he said adding that in 2013 GEA conducted research on fuel handling standards used in India, USA, Canada and Europe for vessels, trucks and tankers transporting fuel and petroleum products.

GEA, he said, subsequently collaborated with the Guyana National Bureau of Standards (GNBS) and Guyana Fire Service to research and formulate draft guidelines for the transportation of fuel using approved containers and drums. During this process, regulations and guidelines from Trinidad and Tobago, USA and Canada for transporting fuel by tanker wagons and other vessels were examined. Precedents were also obtained, and best practices extracted and reviewed, to ensure practicality and applicability to Guyana.

Two standards were then drafted, and submitted to GNBS and Fire Service, by the Agency. A Technical Committee has been convened by GNBS with representation from relevant stakeholders. This committee is currently reviewing the standards with the aim of having it approved and published, he said.

Around the Web