COPEC lauds NPA for suspending eight BDCs and OMCs

The Chamber of Petroleum Consumers Ghana has commended the National Petroleum Authority (NPA) for cracking the whip on eight Bulk Distribution Companies (BDCs) and Oil Marketing Companies (OMCs) which are said to have engaged in illegal activities that led to the loss of petroleum tax revenue to the state.

NPA in a statement on Tuesday, July 24, 2018, announced the suspension of Union Oil Ghana Limited, Agapet Limited, Life Petroleum, Misyl Energy Co. Limited and four others for their involvement in activities which caused a huge revenue loss to the country for a period of between one and three months.

However, COPEC expresses worry over the punishment meted out to the eight companies arguing that it is not punitive.

In a press statement COPEC charged the NPA to review its sanctions regime by making it stiffer in order to deter them from engaging in these criminal acts.

"There clearly needs to be an urgent and steeper review of the sanctioning regime and laws of the NPA to address the disturbing trend of persons and group of persons engaging in all sorts of negative practices for their selfish interests and profits whiles the State and the people continue to bear the brunt of these wicked and criminal actions.

"We also believe there's still a bigger force out there that poses a great danger to the petroleum consuming public as these products they bypass the structured to dump on the market often go untested and unverified to ascertain quality or otherwise whiles also depriving the State itself of the needed taxes," the statement noted.

This cartel ought to be immediately apprehended and flushed out sooner than later to ensure complete sanity of the downstream.

Below is the full statement

NPA must review the sanctions regime

25/07/18

We have followed the news of some 8 Oil Marketing Companies being suspended for periods ranging between 1-3 months for infractions bothering on mainly tax evasions.

The National Petroleum Authority (NPA) in recent times have stepped up efforts at sanitizing the petroleum downstream from the many ills bedeviling the system and eventually the consumer.

Infractions ranging from adulteration, pump adjustments to dispense lower volumes, fuel smuggling and dumping, export and re-export continue to remain a challenge for both the state and the petroleum consumer.

Sanctions for these offences which over the period has ranged from fines and penalties and in recent times suspensions seem not to have yielded much by way of serving a deterrence to others over the period, as the infractions continue unabated and on the ascendancy.

Most of these sanctions have often times been pretty affordable and thus been repeated even on a bigger scale.

Spot checks and fines

The NPA together with other agencies such as the GSA often conducts spot checks across pumps to ascertain the quality and quantity of products being served to the public.

Dealers or Oil Marketing Companies whose tanks fail these checks are often slapped with fines of about ten thousand Ghana cedis per tank.

Such sanctions as imposing fines of about 10,500.00/tank on products that fail the spot checks has done very little so far to deter other dealers who would clearly not mind boxing genuine products with inferior grade ones to achieve higher volumes and eventually higher profits.

One challenge we have is that these fines though reasonable to the Authority's involved does do not in any way compensate or benefit the ordinary consumer who often suffers the negative consequences of being sold these bad products.

Tax evasion and fuel smuggling

The country is on record to have lost a staggering GHC1.8 billion to illegal activities from a powerful cartel that manages to bypass the laid down structures and systems without any taxes.

This cartel comprising of some powerful individuals and dealers continue to operate as of this day and time, Ghana is believed to lose on the average about GHC5 million daily to their activities and it thus comes to us as refreshing news when the NPA arrests some believed to be neck deep in these illegal activities that deprive the state of the needed taxes.

Though we are very much aware of systems being put in place by the NPA to curtail this illegal trade downstream, we expect rather steeper sanctions such as a complete revocation of licenses and surcharging to ensure the state recovers every Cedi lost to their activities if these companies indeed have been found to have engaged in such negative practices as has been reported.

There clearly needs to be an urgent and steeper review of the sanctioning regime and laws of the NPA to address the disturbing trend of persons and group of persons engaging in all sorts of negative practices for their selfish interests and profits whiles the State and the people continue to bear the brunt of these wicked and criminal actions.

We also believe there's still a bigger force out there that poses a great danger to the petroleum consuming public as these products they bypass the structured to dump on the market often go untested and unverified to ascertain quality or otherwise whiles also depriving the State itself of the needed taxes.

This cartel ought to be immediately apprehended and flushed out sooner than later to ensure complete sanity of the downstream.

We commend the NPA for a good job so far in apprehending offenders but we once again reiterate our calls for a complete review of the sanctions regime of the NPA to cater for the sophisticated surge of infractions against the state and the ordinary petroleum consumer.

Signed

Duncan Amoah

Copecghana.