Smuggling of petroleum products reduces

The fight against the smuggling of petroleum products has yielded positive results, as the menace has not been recorded since the beginning of the year.

The country lost close to GH¢1 billion in revenue to petroleum smuggling activities in 2017 because of miscreants who brought in petroleum products in vessels which docked on the high sea and used smaller vessels to siphon them to tankers onshore.

Another form of the smuggling involved some dealers using export licences to enjoy tax reliefs and turning around to sell the products at market prices for astronomical profits, to the disadvantage of law-abiding oil marketing companies (OMCs) and bulk oil distribution companies (BDCs).

The government also lost taxes due it in the process.

However, periodic operations involving officials from the National Petroleum Authority (NPA), the National Security and the Ghana Revenue Authority (GRA) have brought the situation under total control.

The Association of Oil Marketing Companies (AOMCs), which threatened to lay off more than 4,000 workers two years ago if nothing was done to stop the menace, has subsequently commended the government and other stakeholders for taking steps to ward off smugglers.

The products often smuggled included marine gas oil (MGO), petrol and diesel.

Interview

The Chief Executive Officer (CEO) of the AOMCs, Mr Kwaku Agyemang-Duah, and the CEO of the Ghana Chamber of Bulk Oil Distributors (CBOD), Mr Senyo Hosi, in separate interviews, paid glowing tribute to the NPA, under the leadership of Mr Alhassan Tampuli.

They were unanimous in holding that his sterling leadership, with the support of the National Security, had led to a massive improvement in the oil market.

Savings

The loss in revenue to the state, averaging GH¢910.4 million a year, in 2017 and 2018 has not been recorded this year, following stringent measures instituted by the NPA to curb illegal activities in the downstream petroleum sector.

The NPA boss said from September 2017 to September 2018, precisely GH¢892.8 million savings were made, following a significant reduction in volumes of exported products that would have been diverted for personal gain, at the expense of the state.

He said the savings were also attributable to the stoppage of GH¢10.6 million tax leakage on MGO, while GH¢2.3 million had been recovered after 42 bulk road vehicles (BRVs) carrying a total of 1.4 million litres of petroleum products were confiscated.

A tax revenue of GH¢5.2 million was also recovered from people who had under-declared and under-invoiced their products, the NPA boss told the Daily Graphic.

He said the authority had, from September 2017 to September 2018, apprehended more than 20 individuals, 42 BRVs, four canoes and other tools used in smuggling fuel products.

The NPA’s vigilantism, he said, was supported by the Ghana Navy, the National Security, the Defence Intelligence and the Bureau of National Investigations (BNI), which had resulted in savings which would have ended up in the pockets of individuals and businesses engaged in illegal activities in the petroleum downstream sector.

Exports drop

Mr Tampuli told the Daily Graphic that prior to September 2017 when the NPA began rolling out new guidelines to check illegal activities, 50 million litres of petroleum products were allegedly exported monthly, but the figure dropped to two million litres a month when the NPA developed new guidelines for export.

According to checks by the NPA, some companies acquired export licences, lifted products with zero tax but diverted the products back onto the market and sold them way below the market price.

Their operations led to the stifling of the profit margins of genuine OMCs which had to pay taxes, workers’ salaries, utility bills, among others.

Market data

The situation had also improved the volumes of products traded locally between January 2017 and January 2019, according to data submitted to the Daily Graphic by the AOMC and the CBOD.

It also showed that from a decline to negative 0.27 per cent for January 2017, January 2018 and January 2019 recorded a marked improvement of 17.59 and 27.97 per cent local petroleum product consumption, respectively.

Mr Agyemang-Duah commended the NPA’s leadership for its lead role in the fight against the smuggling of petroleum products.

He said his association was also grateful to the National Security Minister, Mr Albert Kan-Dapaah, for his personal involvement in curbing the menace.

The NPA’s new measures aimed at curtailing the conduct of unscrupulous companies also played a pivotal role in improving revenue for the state.

Guidelines

The NPA, in September 2017, developed a number of guidelines aimed at curbing the illegal activities of unscrupulous individuals and companies.

Some of the guidelines include the designation of one exit border for all petroleum product exports to Burkina Faso and Mali; no haulage of petroleum products to Togo except liquefied petroleum gas (LPG); designated dates for export loadings; application to the NPA for export licence and customs clearance.

With regard to MGO dealings, the new directive is that bunkering shall be carried out only by companies duly licensed by the NPA. Verification of documentation on vessels, bunkering companies, point of delivery and digital linkages to revenue agencies to avoid leakages are among the procedures to be followed by companies. 

COPEC

The Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Mr Duncan Amoah, said reports that some government functionaries aided and abetted the smuggling of petroleum products needed to be checked with urgency.

He, however, praised the NPA for its leadership role in the fight against smuggling.