Petroleum Authority spearheads regional harmonisation of petroleum taxes
The National Petroleum Authority (NPA) is spearheading efforts that will see West African countries harmonise taxes and levies on petroleum products meant for export to countries within the sub-region.
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The dependency on imported finished petroleum products to satisfy local consumption has seen a surge in cross-border smuggling of fuel for which the Acting Chief Executive Officer (CEO), Mr Alhassan Tampuli, says the NPA is determined to push for the adoption in West Africa of standards used in East Africa to curtail the illegal sale of fuel across West African countries.
Export standards in East African countries, such as Kenya, are so well coordinated that products being exported from that country to destinations such as Rwanda, Uganda or Burundi attract the same taxes at the point of entry, such that there are no incentive for people to divert products onto that country’s local market, Mr Tampuli told the Daily Graphic in an interview in Accra over the weekend.
Transit products
With Ghana serving as a key transit/transhipment point for finished petroleum products to Mali and Burkina Faso, over 420,000,000 litres of transit products are said to have been diverted and sold on the local market through illegal means.
The harmonisation, he said, would ensure competitive, sustainable and reliable supply of products to meet the country’s development needs and further safeguard appropriate safety measures.
A team seizing products stored for sale to unsuspecting buyers
Officials of the NPA have, therefore, engaged the national regulatory agencies of Mali and Burkina Faso on the need to harmonise their taxes to ensure that the export trade was well coordinated, Mr Tampuli said.
Sulphur content
Ghana, he explained, was already leading the campaign to reduce the sulphur content in diesel from the present 3,000 parts per million (ppm) to 500 ppm, saying “it is only wise that we take up the fight against fuel rustling which if not checked and halted now could have future consequences just as illegal mining has done to our environment and water bodies.”
He said the initiative had received a broad-based support from the government and stakeholders and would be firmed up at the bilateral level between the Ghanaian government and the two countries.
Subsequently, Mr Tampuli said the NPA had extended an invitation to the regulatory authorities of the two countries to visit the authority to enable them to share ideas and experiences.
To institutionalise the arrangements, the NPA, he indicated, was developing a memorandum of understanding (MoU) between the two countries to ensure uniformity in activities against illegal fuel rustling.
That, he said, would dovetail into the NPA’s broader safety agenda aimed at ensuring that the individual and organisations seeking to do business in the sector were properly licensed.
Clampdown
The illegal sale of non-taxable petroleum products is also said to have seen an increased sale of adulterated products on the market, while small-scale syndicates continue to emerge on a daily basis owing to the profitable nature of the trade.
While the government has been losing millions of Ghana cedis in revenues due to the illicit trade, the oil marketing companies (OMCs) have complained that their businesses lose too.
Accidents
The increasing spate of accidents at many retail outlets and fuel tanker operational yards across the country are also said to have come about as a result of illegal activities such as product adulteration.
Some drums of petroleum products seized during the operation being carted to the NPA’s offices for testing
Mr Tampuli maintained that while the authority had issued notice to revoke the licence of players who would be caught engaged in such illegalities, majority of the illegal operators identified by the police were unlicensed operators who sold products on table tops and specialised push trucks “and that is what makes the trade dangerous”, he said.
Western Region
He pointed out that the recent clampdown in the Western Region saw some 10,000 litres of products being seized from illegal operators within various communities.
The exercise, he said, exposed the dangers many residents in communities such as Inchaban, Daboase and Kojokrom were exposed to as a result of the operations of the illegal storage and sales points.
“Persons involved in these activities do not take any safety precautions since they are only interested in profiteering; hence, our determination to sustain the nationwide clampdown exercise to rid the system of the illegalities and also disabuse the importation of products through unapproved routes,” Mr Tampuli stressed.
Modus operandi
He also expressed worry that whereas the Single Point Mooring (SPM) facility at the Tema Port, the Tema Oil Jetty and Takoradi Oil Jetty were the only designated points for imports.
One of the illegal storage facilities identified during the operation
“We have a situation where bigger vessels are said to be conniving by breaking their bulks (cargo) which are discharged into these smaller vessels that often camp along the coasts from Aflao to Ada which in turn discharge into haulage trucks that transport them to the market,” he lamented.
“As an interim measure, approval has been granted by the Economic Management Team for a refundable administrative fee to be imposed by the NPA on all export products transiting through the country,” Mr Tampuli said.
The new measure, he pointed out, would also require that products in transit went with a specialised delivery form designed by the NPA which would be endorsed by officials of the receiving country.
Mr Tampuli stressed that the designation of the two bulk fuel depots in Tema and Bolgatanga by the Ministry of Energy would equally discourage the illegal practice.