Duty free galore to foreigners...RUSAL is Guyana’s largest private fuel retailer

Duty free galore to foreigners…RUSAL is Guyana’s largest private fuel retailer

Nov 24, 2019 News

The Guyana Revenue Authority (GRA) is currently investigating the Russian owned Bauxite Company of Guyana Inc. (BCGI/RUSAL) about the resale of the fuel, which it imports. Independent investigations by this publication have revealed that the company has been in the business of fuel sales from its inception.RUSAL has been granted a waiver of duties as part of an incentive for its investment in Guyana.

Some of the fuel storage tanks used by RUSAL.

This means that the tax normally paid to the government on the importation or purchase of the fuel is not being paid by RUSAL.
The company in turn retails the gasoline and diesel, which it does not pay taxes on.
Compounding matters is the fact that in addition to private individuals and employees of the company, as some of its customers, several large-scale businesses are also in cahoots with RUSAL.
These include Minequip Corporation, Oldendorff Carriers—the company it has contracted to ship its bauxite out of the Berbice River—Universal Contracting Services Limited, MACORP, R. Jaisingh Transportation and Reliable Industries, among other companies and private individuals.
RUSAL has kept detailed records of its fuel sales. The records seen by this publication document monthly sale to the entities, the quantities, amounts paid, addresses and invoice numbers for the transactions.
Records seen by Kaieteur News demonstrate that the company in January 2015 sold as much as $25M dollars worth in fuel.
Sales continued monthly at varying amounts $5M in February, $4M in April escalating to $14M by June, $16M by October, $14.2M the following month and closing the year with $11M in December.
This trend continues at an average of about $15M monthly, the following year and has continued at the same base average in ensuing years.
This means that RUSAL has sold just about $1B dollars in fuel at market price—fuel that it had imported or purchased duty-free for its bauxite operations.
Previous investigations by this publication had found that RUSAL’s operation had cost Guyanese more than US$100M so far, in fuel alone, that was imported and duties not paid.
This would mean that the foregone taxes are in fact additional profits that RUSAL makes on top of the fuel it resells that it had imported duty-free.
The company has never paid any dividends to its 10 percent partner, the Guyana Government.
Investigations by Kaieteur News had found that the company ‘uses’ daily, an average of 18,350 gallons of diesel fuel.
This equates to 6.7 million gallons each year. The net effect is that the company in the past two and a half decades of its operations in Guyana, used an estimated 94 million gallons of diesel fuel.
US Refineries between 2005 and this year, sold diesel wholesale at an average of between US$1.50 and US$2.25 per gallon, sometimes reaching as high as US$3.90 in mid 2008.
Using a conservative mean of US$2.00, this means that the company would have purchased US$188M in duty-free fuel. The government waived the fuel tax or US$94M.
According to the pact inked between the parties in the 2005 Fiscal Incentives Agreement, RUSAL shall also be exempted from the payment of withholding tax on interest, dividends and lease payments to its affiliates.
The company has also been exempted from payment of all and any duties and taxes on equipment, machinery, motor vehicles and supplies.