Guyana’s Energy Agency Responds in Q&A about Fuel Smuggling

Instant Max AI

(Energy Analytics Institute, Piero Stewart, 30.May.2018) – Fuel smuggling from countries neighbouring Guyana is a major issue. The small South American country has developed the Fuel Marking Programme to address the issue.

 What follows here within are questions from Guyana’s Stabroek News directed at the Guyana Energy Agency (GEA) and the answers from the latter.

1. Stabroek News (SN): SN has received numerous reports that fuel is being smuggled into Guyana from Venezuela. Is the GEA aware of this?

Guyana Energy Agency (GEA): Arising from complaints about 2004 that there was significant smuggling of fuel into Guyana, with about one third of the fuel used in Guyana believed to have been smuggled, the Fuel Marking Programme was established.

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.

While we are unsure of the source of this illegal fuel, one may presume that it originates from neighbouring countries such as Suriname, Trinidad and Tobago and/or Venezuela.

The success of the Fuel Marking programme, 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 strategized about where their presence is needed. 

The Agency continuously monitors and reassesses their 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.

2. Stabroek News: Has there been any dialogue between officials of the GEA and the police or the mining association or the Ministry of Natural Resources on the presence of illegal fuel in areas such as the North West and the Essequibo Coast. If so when last where any dialogues held and what were some of the recommendations made?

Guyana Energy Agency: 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. The resulting cooperation between the Guyana Police Force, Guyana Revenue Authority, Guyana Energy Agency, Guyana Defence Force Coast Guard and 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 Guyana Revenue Authority (GRA) in joint operations have proven invaluable in combating the illegal fuel trade.

The GEA is also part of the Hinterland Intelligence Committee (HIC), which was organized by the Guyana Police Force (GPF) and is chaired by the Commissioner of Police. Members of this committee include the Guyana Defence force (GDF), Civil Aviation Authority, Guyana Geology and Mines Commission (GGMC), Guyana Gold and Diamond Miners Association, Guyana Revenue Authority (GRA), Guyana Police Force, Association of Aircraft Owners, Ministry of Health, Ministry of Local Government, Guyana Forestry Commission and the Guyana Women Miners Organization, among others.

Many issues are discussed at monthly meetings of both the Task Force and HIC, including the issue of fuel smuggling. 

Additionally, the GPF is usually consulted when there is an emergency or if a tip is received. GEA usually solicits the support of other enforcement Agencies as required. 

3. Stabroek News: Are there any GEA officers present in Port Kaituma, any other part of the North West and the Essequibo Coast to check for illegal fuel? If so can you give a total figure or an average of the number of officers present in the Northwest and Essequibo and the locations where they are based. For example two are based at Port Kaituma and one close to the Venezuela border.

Guyana Energy Agency: GEA has permanent bases at Georgetown, Linden and Essequibo.

The GEA has more than 20 Field Officers tasked with testing fuel across the country.  

To ensure operational integrity and security, the Agency cannot disclose the number of staff present at these locations.

4. Stabroek News: Is there a process in place by the GEA to (a) check fuel boats in the North West to ensure that they are meeting the required standards and if so how often is this done (b) to ascertain where the GEA’s presence is mostly needed for example in the case of the North West whether it would be more beneficial to have officers based near the Guyana/Venezuela border at points where it is known that illegal fuel passes through?

Guyana Energy Agency: Government, recognizing 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 utilized within the border area. For fuel, for the time being, this applies to all of Region 1; down the Cuyuni to below Aranka in Region 7, and sub-Region 1 of Region 8. At this time, fuel supplied from our coast to Region 9 is generally less costly from fuel coming across the Brazilian border. Government does not consider fuel traded across the border as illegal in the areas mentioned.

5. Stabroek News: In relation to the recent explosion at Port Kaituma, is the GEA conducting any investigations to ascertain whether the boat that exploded and the others which were burnt were carry illegal fuel?

Guyana Energy Agency: Fires and explosions fall under the purview/responsibility of the Guyana Fire Service and the Guyana Police Force. 

In fact, the Guyana Fire Service is preparing a report which will be the basis for discussions amongst relevant Government Agencies and other stakeholders.

6. Stabroek News: Has GEA officials gone around the community to persons who are selling fuel to ascertain whether it is legal or illegal?

Guyana Energy Agency: Officers of the GEA visit the area at least twice per year to learn about what is happening in the area.

The Task Force on Fuel Smuggling and Contraband has, in the past, visited the communities.

7. Stabroek News: Have complaints ever been made to the GEA about the presence of illegal fuel at Port Kaituma and if so what has been done about it?

Guyana Energy Agency: See response at 4. above.

8. Stabroek News: On a general note how big an issue is illegal fuel in Guyana and where does the bulk if it comes from?

Guyana Energy Agency: Illegal fuel causes loss of revenue from related tax losses and also has a negative effect on legitimate businesses. Prior to 2003 Guyana was facing a large number of 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. 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.  

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. Subsidiary legislation in the form of the Petroleum and Petroleum Products Regulations 2004 was also created to regularize fuel operations.

The Fuel Marking Programme 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 constant monitoring and maintenance of the Fuel Marking System’s integrity is absolutely necessary for its continued success.

While we are unsure of the source of this illegal fuel, one may presume that it originates from neighbouring countries such as Suriname, Trinidad and Tobago and/or Venezuela. 

9. Stabroek News: Why do you think persons insist on transporting and using illegal fuel as oppose to legal fuel?

Guyana Energy Agency: GEA too would like to know.

10. Stabroek News: What are some of the dangers attached to having illegal fuel in one’s possession?

Guyana Energy Agency: Persons found with illegal fuel can be prosecuted. 

Illegal fuel can also 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.

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. 

11. Stabroek News: In addition to marking fuel, does the GEA’s work also entail ensuring that the boats meet the required standards for transporting and storing fuel?

Guyana Energy Agency: A Bulk transportation Licence from the GEA if a person is transporting an aggregate quantity of 2000 litres of petroleum and petroleum products in a vehicle, vessel or boat.

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 License from the Guyana Fire Service (GFS) b) Maritime Administration Department (MARAD) Inspection Certificate c) Captain’s License d) Vessel License (MARAD).

GEA continuously monitors and evaluates its strategies and procedures. 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 subsequently collaborated with the Guyana National Bureau of Standards (GNBS) and Guyana Fire Service (GFS) 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 GFS, by the Guyana Energy 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. 

12. Stabroek News: Does the GEA have a list of persons in the Northwest who transport fuel and if one wants to enter into such a business what is the process in place for doing so?

Guyana Energy Agency: Answer: See response in 4 above.

A link to the original PDF on the Guyana Energy Agency (GEA) website follows:

http://www.gea.gov.gy/index.php?option=com_content&view=article&id=3&Itemid=107

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