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Rwanda moves to keep out tainted fuel
By Beatrice Philemon
16th June 2010
TATOA gives hints on how and where adulteration is done
The chairman of Tanzania Truck Owners Association, TATOA, Seif Seif
Rwanda has sent back to Tanzania 60 fuel trucks, after learning they were carrying adulterated fuel, it has been said.
The chairman of Tanzania Truck Owners Association, TATOA, Seif Seif said the trucks were returned into the country under escort, warning that the crimional practice threatened our credibility and trade links in the region.
He warned the nation will lose credibility from our neighbouring nations which import fuel from Tanzania such as Burundi, Rwanda and the Democratic Republic of Congo.
"We need to stop this tragedy because it is very serious for the country," Tanzania Association of Oil Marketing Companies(TAOMAC) chairman Nick McAleer said at the press conference on Monday. "We have turned Rwanda into a product dump area. Our economy will be hurt if they stop importing our products."
The truck owners and oil marketing firms addressing a press conference on Monday said the government needs to institute legal action against truck drivers and petrol station owners who collude to adulterate petrol and diesel.
The TATOA spokesman Zacharia Hans Poppe reiterated his association's stand in an exclusive interview with the Guardian yesterday; emphasizing that the adulterated fuels found in petrol stations across the country was an outcome of collusion between truck drivers and unethical petrol station owners, and that legal action should be taken against them.
Explaining over the phone how the fuel is adulterated, TATOA spokesman Hans Poppe said a fuel retailer calls a fuel theft agent in Dar es Salaam, the agent identifies a driver loading diesel or petrol at a fuel depot in the city. The driver gives his telephone number to the agent. The agent passes the number to a fuel retailer at one of the following areas known for fuel theft: Buguruni in Dar es Salaam, Gairo in Morogoro, Kibaigwa, Ibologelo between Igunga and Nzega, Nzega, Ushirombo in Kahama district, very close to a police station, and a place known as Runzewe.
He said the retailer then calls the driver and gives instructions on where to deliver the good fuel in exchange for kerosene. When the driver arrives at the retailer's site, a required amount of good petrol or diesel is off-loaded from the truck, and the resulting empty space is filled with kerosene from the retailer, so that the recipient of the order at the final destination will not notice a shortage.
And so a certain amount of the good petrol or diesel that remains in the truck is mixed with kerosene, ready for selling at the final destination as ‘good fuel.' The retailer's site is usually hidden at a petrol station or a warehouse.
The driver sells diesel or petrol to a retailer at say 30% below the market rate. He then uses his money to buy kerosene from the retailer usually a petrol station --at a rate much lower than his earnings from the retailer. The driver then keeps the difference between his earnings from the cheap sale of good fuel and his kerosene purchase.
But Hans Poppe believes the fuel adulteration is mainly motivated by greed among the truck drivers, since they are well paid. A truck driver gets a monthly salary of 250,000/- and an allowance of USD 700 for each trip to Rwanda or Burundi. Out of the USD 700, only USD200 is for transportation costs such as road toll. The rest of the allowance is the driver's personal money, over and above the monthly salary.
At the joint press conferences on Monday, stakeholders also said the main source of oil adulteration in the country was the low price of kerosene and backed an appeal for standard taxation of petroleum products, saying it would help curb adulteration costing the government 300 billion/- annually. They called on the government to regulate kerosene prices because the intention of lowering the price does not benefit the intended group, but a few people who were adulterating the oil.
He said no thorough research was conducted to establish the advantages and disadvantages of lowering the tax for kerosene or whether the move aimed at helping low income earners would not be misused by other people.
"The only solution to this problem is to either increase taxes for kerosene or to lower taxes for diesel and petrol because the big difference tempts the drivers to adulterate the oil which enables them to earn a lot of money," Seif said.
He said that since the price for diesel and petrol was 1,700/- per litre while the prices for kerosene per litre is 800/- a drivers who transport oil will be tempted to adulterate the oil and sell it at a huge profit.
He said the government loses 462/- for each litre of kerosene which replaces diesel and 487/- for a litre which replaces petrol or an average of 474/- lost per litre.
According to recent statistics there are 36 million litres of kerosene worth 17bn/- per month which are being adulterated and when added to the tainted fuel which is exported, the country loses not less than 25bn/- per month, which is potential tax revenue.
"This is a lot of money. It could help in paying school fees for children coming from poor families," Seif said.
Energy and Water Utilities Regulatory Authority Director General Haruna Masebu said the country's laws hold accountable all the people who are involved in oil adulteration including drivers. It does not however bind the drivers who drive the trucks carrying the transit fuel.
"The law is applicable on the local market, thus truck drivers who adulterate transit oil fall under the Tanzania Revenue Authority," he said.
He said among the efforts which EWURA was making was the introduction of colour marking scheme and mobile laboratories to detect the fuel which has been adulterated. The scheme would go into effect from August this year applying to the local market.
He said Ewura was cooperating with TRA to work on the possibilities of controlling the adulteration of fuel which is on transit.
He said plans were underway by TRA to introduce an electronic device which will help TRA to detect an adulteration of the fuel on transit.
He however said that there was no doubt that if the reduction of tax on kerosene was removed it will help to end the oil adulteration in the country.
SOURCE: THE GUARDIAN
By Beatrice Philemon
16th June 2010
The chairman of Tanzania Truck Owners Association, TATOA, Seif Seif
Rwanda has sent back to Tanzania 60 fuel trucks, after learning they were carrying adulterated fuel, it has been said.
The chairman of Tanzania Truck Owners Association, TATOA, Seif Seif said the trucks were returned into the country under escort, warning that the crimional practice threatened our credibility and trade links in the region.
He warned the nation will lose credibility from our neighbouring nations which import fuel from Tanzania such as Burundi, Rwanda and the Democratic Republic of Congo.
"We need to stop this tragedy because it is very serious for the country," Tanzania Association of Oil Marketing Companies(TAOMAC) chairman Nick McAleer said at the press conference on Monday. "We have turned Rwanda into a product dump area. Our economy will be hurt if they stop importing our products."
The truck owners and oil marketing firms addressing a press conference on Monday said the government needs to institute legal action against truck drivers and petrol station owners who collude to adulterate petrol and diesel.
The TATOA spokesman Zacharia Hans Poppe reiterated his association's stand in an exclusive interview with the Guardian yesterday; emphasizing that the adulterated fuels found in petrol stations across the country was an outcome of collusion between truck drivers and unethical petrol station owners, and that legal action should be taken against them.
Explaining over the phone how the fuel is adulterated, TATOA spokesman Hans Poppe said a fuel retailer calls a fuel theft agent in Dar es Salaam, the agent identifies a driver loading diesel or petrol at a fuel depot in the city. The driver gives his telephone number to the agent. The agent passes the number to a fuel retailer at one of the following areas known for fuel theft: Buguruni in Dar es Salaam, Gairo in Morogoro, Kibaigwa, Ibologelo between Igunga and Nzega, Nzega, Ushirombo in Kahama district, very close to a police station, and a place known as Runzewe.
He said the retailer then calls the driver and gives instructions on where to deliver the good fuel in exchange for kerosene. When the driver arrives at the retailer's site, a required amount of good petrol or diesel is off-loaded from the truck, and the resulting empty space is filled with kerosene from the retailer, so that the recipient of the order at the final destination will not notice a shortage.
And so a certain amount of the good petrol or diesel that remains in the truck is mixed with kerosene, ready for selling at the final destination as ‘good fuel.' The retailer's site is usually hidden at a petrol station or a warehouse.
The driver sells diesel or petrol to a retailer at say 30% below the market rate. He then uses his money to buy kerosene from the retailer usually a petrol station --at a rate much lower than his earnings from the retailer. The driver then keeps the difference between his earnings from the cheap sale of good fuel and his kerosene purchase.
But Hans Poppe believes the fuel adulteration is mainly motivated by greed among the truck drivers, since they are well paid. A truck driver gets a monthly salary of 250,000/- and an allowance of USD 700 for each trip to Rwanda or Burundi. Out of the USD 700, only USD200 is for transportation costs such as road toll. The rest of the allowance is the driver's personal money, over and above the monthly salary.
At the joint press conferences on Monday, stakeholders also said the main source of oil adulteration in the country was the low price of kerosene and backed an appeal for standard taxation of petroleum products, saying it would help curb adulteration costing the government 300 billion/- annually. They called on the government to regulate kerosene prices because the intention of lowering the price does not benefit the intended group, but a few people who were adulterating the oil.
He said no thorough research was conducted to establish the advantages and disadvantages of lowering the tax for kerosene or whether the move aimed at helping low income earners would not be misused by other people.
"The only solution to this problem is to either increase taxes for kerosene or to lower taxes for diesel and petrol because the big difference tempts the drivers to adulterate the oil which enables them to earn a lot of money," Seif said.
He said that since the price for diesel and petrol was 1,700/- per litre while the prices for kerosene per litre is 800/- a drivers who transport oil will be tempted to adulterate the oil and sell it at a huge profit.
He said the government loses 462/- for each litre of kerosene which replaces diesel and 487/- for a litre which replaces petrol or an average of 474/- lost per litre.
According to recent statistics there are 36 million litres of kerosene worth 17bn/- per month which are being adulterated and when added to the tainted fuel which is exported, the country loses not less than 25bn/- per month, which is potential tax revenue.
"This is a lot of money. It could help in paying school fees for children coming from poor families," Seif said.
Energy and Water Utilities Regulatory Authority Director General Haruna Masebu said the country's laws hold accountable all the people who are involved in oil adulteration including drivers. It does not however bind the drivers who drive the trucks carrying the transit fuel.
"The law is applicable on the local market, thus truck drivers who adulterate transit oil fall under the Tanzania Revenue Authority," he said.
He said among the efforts which EWURA was making was the introduction of colour marking scheme and mobile laboratories to detect the fuel which has been adulterated. The scheme would go into effect from August this year applying to the local market.
He said Ewura was cooperating with TRA to work on the possibilities of controlling the adulteration of fuel which is on transit.
He said plans were underway by TRA to introduce an electronic device which will help TRA to detect an adulteration of the fuel on transit.
He however said that there was no doubt that if the reduction of tax on kerosene was removed it will help to end the oil adulteration in the country.
SOURCE: THE GUARDIAN
