(Trinidad Express) The extensive network of the illegal bunkering of diesel ultimately charters a course for the high seas- where it fetches top dollar on the black market.
But long before it disappears into the configured tank of a vessel there’s a certain degree of wheeling and dealing allegedly happening on land.
A confidential report prepared by the manager of Auditing Services, Reynold Mahadeo at the Ministry of Energy within the last year and obtained exclusively by the Express reveals a tale of how vessel owners abuse the system, peddlers who sell diesel without a bunkering licence, fictitious buyers and claims of irregularities associated with subsidy payments.
Former Minister of Energy Carolyn Seepersad-Bachan, now Minister of Public Administration, said when she first assumed the Energy Ministry office in May 2010 several alarm bells went off.
“It is clear that there was no way if you look at the growth over the last four to five years that the growth of diesel could have taken place in this country alone and therefore there must have been some illegal export of diesel out of Trinidad and Tobago.
“When I was NP chairman in fact, during that period we had a similar problem and that led to the shutdown of a service station in Rousillac and the suspension of some licences of transporters and peddlers because it was clearly a scam that was taking place.”
A similar sentiment was expressed by Minister of Energy Kevin Ramnarine who indicated this illegal industry stretched across the Caribbean.
“We have been advised the diesel is going to a number of Caribbean countries, given the price of oil on the international market is so high, it is been used in various industries in other Caricom countries and it has to be going somewhere and it is not going to Trinidad and Tobago. We are finding it on boats that are leaving this country so it’s going to support underground economies in other countries.”
What the Ministers speak about is real.
And the confidential report the Express secured substantiates this.
Drawing reference to the National Petroleum Marketing Company and two of its peddlers in 2009, the report states:
“Audit also obtained the volumes of diesel sold for 2009 by two NPMC peddlers to indicate the apparent abuse of the system that is perpetrated by the owners of fishing vessels.”
The report shows several tables with one pointing to two peddlers selling what they described “as inordinately high volumes of diesel” to several boat owners.
Several senior sources inside the Ministry of Energy said neither of these peddlers owns a bunkering licence and should not be selling to boat owners. Only NP is allowed to do this and competitor Unipet to a limited extent.
In one case, the report purports that one boat owner, apart from purchasing high volumes of diesel on a monthly basis, also purchased fuel from both peddlers, sometimes in the same month.
Mahadeo’s confidential audit report went a step further, by pulling out three months in 2010 to ascertain whether the trend in high volumes of diesel purchased by fishing vessels from one peddler continued.
The numbers were staggering.
During that three-month period between August and October some 5.4 million litres were sold to just nine vessels.
NP chairman Neil Gosine has said they were moving on their side to ensure this practice is halted.
“It is something that will take us a while, but we going to get to the bottom of it.”
Questions were also raised in the report about Unipet’s customer base- they being the only authorised dealer apart from NP.
The Ministry of Energy audit report said it observed several customers and companies purchasing high volumes of diesel between the months of May 2010 and November 2010 and afterward.
What the report contended was that these companies were buying diesel using a drogher’s licence from a third party.
A drogher’s licence together with a certificate to navigate is needed before a vessel can purchase subsided fuel.
Mahadeo recommended that no subsidy be paid to NPMC and Unipet on volumes of diesel sold to those buyers who have been using a drogher’s licence in the name of a third party and firmly recommended in the future, the licence issued to these marketing companies have a clause prohibiting this practice.
Unipet’s general manager Anthony Tang says various scenarios can give rise to this situation, which in his view, are just perceived differently.
“In some instances the person leasing the vessel, they pick up the charges and they say bill them directly. What we do in cases like that is where it is not the owner we not only on our invoice specify who we are billing but we also specify the vessel which we are billing to, in order to justify that sale when we are claiming subsidy,” explained Tang.
And that’s why the government is now moving in a particular direction to ensure there’s no way of cheating the system, according to Minister of Energy Ramnarine.
“We have established a subsidy verification unit at the Ministry of Energy and there are other legislative changes coming this year to treat with peddlers. We intend to change the law to what you call authorised distributors, so those changes will continue to come in 2012. It’s like the drug trade, we can never totally eradicate it but I believe we certainly have dealt a blow and we’ll continue to deal more blows,” Ramnarine said.
