GEA response to fuel marking

Nov 19, 2020 Letters

Dear Editor,

Kaieteur News – This is the Guyana Energy Agency’s response to published letter in the newspapers of November 18, 2020 entitled ‘The basis for fuel marking no longer exists’ by Mr. Reggie Bhagwandin. The simple answer to the question posed by Mr. Bhagwandin as to ‘whether fuel smuggling is still a threat to legitimate dealers’ is yes.
The purpose of marking fuel imported into Guyana is to identify the legal fuel from illegal or smuggled fuel and in the process, curb fuel smuggling and the resulting losses in revenue to the Government. Notwithstanding the situation in Trinidad and Venezuela it is important to note that diesel continues to be sourced from Venezuela. As recent as last week, the captains of two separate fuel vessels reported sourcing their diesel from Venezuela.
The actual cost of marking the fuel to the individual consumer is miniscule, G$0.60 per litre for large fuel importers. Today’s (Nov. 18, 2020) price for gasoline at GuyOil is G$155 per litre. The marking fee represents 0.39% of the cost per litre.
The point should be emphasised that the intent of smugglers is to avoid payment of local taxes. The fuel marking programme utilises forensic technology to identify taxed and untaxed fuels.
The record GEA’s record has shown that with the advent of the marking programme the ‘percentage of sites found with significant dilution in at least one tank’ has reduced from 34% in 2006 to <1% in 2019. This has contributed to, among other things:
– the collection of appropriate taxes by the Guyana Revenue Authority. It is estimated that the sustained collection of taxes from legitimate imports will move from over US$40M in 2021 to nearly US$60M by 2025. The loss of this collection of taxes may not only end up in the pockets of fuel smugglers, but rob the country of vital revenue needed for development;
– the fuel imported is of an appropriate quality. Smuggled fuel is notorious for being of low and substandard quality. This causes more harmful emissions.
– the prevention of adulterated fuels ending up on the open market. Damage to machinery and equipment can lead to downtime in many important sectors across the country. The various fuels imported need to be monitored to ensure it is not being adulterated – something which is supported by the marking programme.
It should be noted that the fuel marking programme provides direct employment to over 50 employees of the GEA, not to mention the many other indirect forms of employment as a result of the goods and services required by the fuel marking programme.

Yours truly
Guyana Energy Agency (GEA)

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