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Humans · Nature · Economy

Illegal smuggling for oil in Ghana

June 18th, 2018
in:Humans, Nature, Economy
by:Kwabena Adu Koranteng
located in:Ghana
tags:fuel smuggling, Ghana, Tema

Fuel smuggling has been described as the most lucrative illegal trade in Ghana. Despite the dangerous nature of the business many people continue to engage in it for quick and easy wealth.

The business is done by all sorts of people in society, from politicians, business men, security officers among others. The Tema industrial enclave and some secrete locations in Ashaiman and Kpone are noted as the hub of the smugglers.

Investigation reveals that most of the petroleum products are smuggled from the tank farms in and around Tema and the Tema oil Refinery .These are loaded into haulage trucks and transported to some fuel retail stations across the country and sold and the proceeds shared among the operators.

Investigation reveals that about 90% of the smuggled fuel is also diluted to increase the quantity to generate huge profit. Petrol is mixed with kerosene to increase the quantity for more profit.

When this investigative reporter visited Ashaiman several places were found where these activities take place. These are huge yards protected by walls where vehicles had parked and were discharging fuel into some large containers while others were loading already mixed fuel products.

Sources say the petroleum products are sometimes diluted at the midstream level, that’s at the storage or at the refinery and processing level and transported downstream for sale to avoid detection

At Tema, the Lube Bay, a very big yard with tall walls all around close to the Tema oil refinery is where the illegal trading of fuel takes place. This is where the kingpins trade their fuel. Between 11pm and 2:30 am every night, all sorts of people visit the yard to buy petrol or diesel in large quantities. People from all professional backgrounds visit the place to buy cheap fuel, our investigations reveal.

“People come here every time to do fuel business, people from the security services, universities, mechanics, small scale unregistered fuel dealers among others come here to buy fuel and go and sell’, said Umaru Abdulai , a fuel trader at site opened up to this journalists who posed as a customer who had gone there to buy petrol to fill his car.

“People come as far as the three northern regions to buy fuel. Others have business partners here who load the tanker for them. It’s a big business and that is what we do here to survive. They transport the fuel from the tank farm into our yard then we sell it and pay them and we share the profit”. “Hassan Tettey , an smuggler also explained .

“The difference is that we don’t pay tax to government and because it’s a smuggled fuel we sell cheaply to make our profit and share equally according to the role one plays in the distribution process” he told this reporter.

“This is the business we do to survive. I do it to take care of my wife and children. What we do here is an open secret and nobody disturbs us because everybody is sorted out. Yes there have been raids here before but that was a long time ago when the refinery was very active. Today because refined products are imported smuggling from the refinery has minimised so they have halted the raid. The smuggling is mainly done from the tank farms around Kpone and brought here for distribution.

He explained that in some cases their big bosses pose as exporters and cut the fuel with the aim of selling them outside the country and enjoy low taxes and subsequently divert and sell them at prices lower than what is officially sold at the market with taxes.

Economic experts have predicted that Ghana will lose between GH¢ 1.7 Billion and GH¢ 2 billion in 2018 from smuggling of refined petroleum products, a worrying situation at a time that government is working to generate more revenue to implement its Ghana Beyond Aid agenda.

In 2017 Ghana lost about GH¢ 1.5 billion in taxes and levies due to incidents of smuggling of fuel products. In 2016 Ghana lost an estimated GH¢ 800 million as a result of the problem,. But for smuggling, Ghana would have gained more than GH¢ 5 billion in revenue in 2017.

The President of the AOMCs, Mr Kwaku Agyemang-Duah, in an interview stated that that close to five thousand people in the downstream oil sector lost their jobs in 2017 as a result of fuel smuggling. He described the situation as worrying and begged government to start arresting and prosecuting people who are involved.

The Executive Secretary of the COPEC, Mr Duncan Amoah, stated that fuel fraud via tax evasion has robbed Ghana millions of US dollars in tax revenues annually with further losses to the unsuspecting public.

He said delays in implementing measures against smuggling has emboldened the fuel smugglers to step up their operations from hitherto covert to now overt such that they now operate huge illegal tank yards dotted all over the country with most in the capital.

Most legitimate OMCs are known to be struggling with cost of utilities especially electricity charges for their operations thereby making the industry hardly profitable whiles the fuel smuggling syndicate also squeeze the remaining volumes from them in broad day light, Mr Amoah noted.

Fuel smuggling is noted to causes harm to environment, results in increased fuel consumption and worsens public health as most of the smuggled fuel remains largely untested and certified for public use but still finds its way to the pumps.

The National Petroleum Authority (NPA) though announced some stringent measures to curb; this has not worked as the smuggling continues to increase.

The Chief Executive Officer of the National Petroleum Authority (NPA), Alhassan Tampuli said the NPA, in collaboration with National Security, recently confiscated 15 trucks which were found to be engaging illegal acts. “By virtue of NPA’s Act (Act 691) we are not able to go further than this. So we are partnering with Custom Excise and Preventive Service in Ghana to use their Law to confiscate all these 15 trucks and we are about to put them on auction. This did not happen when this reporter checked.

SECTION 78 clause 1 of the National Petroleum Authority ACT ,NPA ACT 691 of the year 2005 states that Where a person connives or colludes with a bulk transporter to make false representations to the fund co-coordinator in respect of petroleum products not delivered to destinations for which they had been collected, the Authority shall suspend the licenses of that person and the bulk transporter for the period that the Authority shall determine.

The clause (3) states that a person who falsifies a calibration certificate of its bulk road vehicle with the sole aim of cheating and causes the shortage and under delivery of petroleum products to retail outlets shall be sanctioned by the Disciplinary Committee established under section 10 (1). (4) Where a transporter’s own vehicle is involved in an act that results in the contravention of a provision of this Act, the Authority may suspend or revoke the license of that transporter.

22 Offences related to transportation of petroleum products 79. (1) Where a transporter or an agent of that transporter compromises the quantity and purity of petroleum products, that transporter or agent commits an offence and is liable on summary conviction to a term of imprisonment not exceeding two years or to a fine not exceeding five thousand penalty units calculate in a currency determined by the Minister or both.

(2) A driver of a bulk road vehicle who adulterates a petroleum product commits an offence and (a) is liable on summary conviction to a term of imprisonment not exceeding two years or to a fine not exceeding five thousand penalty units calculated in a currency determined by the Minister, or both; and (b) Shall be prohibited from driving a bulk road vehicle that belongs to a member of the Tanker Owners’ Union. Interestingly, in spite of all these regulations, the country is yet to see a single person persecuted regarding such acts.

Article written by:
Kwabena Adu Koranteng
Author
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Embed from Getty Images
The business is done by all sorts of people in society, from politicians, business men, security officers among others.
Embed from Getty Images
Investigation reveals that about 90% of the smuggled fuel is also diluted to increase the quantity to generate huge profit.
Embed from Getty Images
The activities take place in huge yards protected by walls where vehicles had parked and were discharging fuel into some large containers.

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