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Major drop in illegal fuel at pumps – GEA

May 30, 2012 News

 

Guyana has recorded a major drop in the incidence of illegal fuel being sold at gas stations and other retailers, government has disclosed.
“Since 2006, the rate of fuel adulteration detected has substantially dropped each year and we will continue, undeterred in our efforts, to eliminate fuel smuggling,” says Dr. Mahender Sharma, Chief Executive Officer of the Guyana Energy Agency (GEA).
The agency, which regulates the fuel import and distribution trade in Guyana, hired Authentix, a global leader in fuel authentication, to help Guyana reduce fuel crimes that result in lost tax revenues.
According to the Texas, US-based company, since it started to mark Guyana’s fuel in 2006, the level of adulteration has dropped significantly, resulting in increased tax revenues.
“From 2006 to 2011, the percentage of identified sites found with illegal fuel has progressively decreased from 34% in 2006 to 2% in 2011. Continuing efforts are being made to keep this level low and drive down the level of illegal activity even further.”
GEA has been battling fuel smugglers who use fishing boats and trawlers, devising a series of ingenious ways to bring their booty into the country. It is quick cash for the smugglers. There have not been many arrests and convictions.
Recently, there was a major investigation after a container at the GEA’s city headquarters in Quamina Street was broken into and a quantity of fuel markers stolen. The special markers are used to colour the fuel in a particular way that will allow GEA inspectors to check authenticity.
According to Authentix, Guyana was facing a myriad of fuel-related tax losses when it started working with GEA.
“Non-taxed fuel was being smuggled into Guyana and sold illegally to retail sites with no means of identifying which fuels were legally imported and which were smuggled. Additionally, taxed road fuels were being adulterated with low-tax kerosene.”
To combat these problems, Authentix fuel markers were blended into legitimate fuel at secure terminals. Samples from retail stations were then tested for the expected concentration of these markers.
“Any level of dilution is quickly determined and proper enforcement procedures are then initiated by the GEA. The implementation of the fuel marking program has enabled authorities to reduce the incidence of fuel smuggling in the country and recover revenues that would have been lost through illegitimate sales and tax evasion.”
According to Sharma, the country has benefitted.
“Guyana has seen a myriad of additional benefits, including improved and sustained sales of legitimate fuel as well as improved and sustained collection of excise tax. The marking program is also an economic boost, as it provides dozens of local jobs.”
Lal Pearce, President, Global Business Development, Authentix noted that “the vigilance of the GEA combined with the effectiveness and continued use of the Authentix fuel marking program ensures that the rate of fuel-related crimes will continue to decrease.”
Authentix manages the program turnkey with the GEA. An internal analysis by the GEA, completed in 2009, estimated that the net benefits of the program has seen a 443% return on investment.
Authentix provides brand protection, excise tax recovery, and supply chain security solutions to governments and Fortune 500 companies around the world. It is involved in safeguarding clients in the oil and gas, pharmaceutical and consumer goods industries from counterfeiting, smuggling and adulteration issues. In addition, Authentix protects the currency of multiple industry-leading central banks. To date, Authentix said it has helped recover $11billion in lost revenue for its clients.

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