Mar 02, 2016 News
A Chinese company, China Zhonghao Inc., appears to have had the first jump in the country’s fuel export
While Guyana has not even started to pump oil as yet, the Chinese company has been granted a licence to export fuel.
The details were published in the Official Gazette of February 13, last, and are raising eyebrows.
Indeed, the amended Petroleum and Petroleum Products Regulations of 2014 allow for applications to be made for an export licence for fuel. However, it seems that the licence for China Zhonghao will be the first, even surprising insiders of the Guyana Energy Agency (GEA) who said that they are not aware of any being granted before.
The regulations indicated that an applicant desirous of exporting petroleum and petroleum products has to apply to the agency and must lodge supporting documents.
These documents are the same as for wholesale or import wholesale licences.
The applicants must provide specifications of the petroleum and petroleum products to be exported and a list of all ports of exit or export for the petroleum and petroleum products to be exported.
In early January, Government disclosed that a multi-million-dollar bulk fuel importation operation on the East Bank of Demerara, was on hold, with the Chinese owners asked to dismantle an unauthorized wharf construction.
According to Minister of Public Infrastructure, David Patterson, the operation called “Falls” and located at Coverden, reportedly built a larger-than-authorized wharf.
Officials from the Maritime Administration Department (MARAD) reportedly unearthed the unauthorized works during inspections. The matter was reported to the Ministry, with the company ordered to do corrective works.
The fuel operation is reportedly associated with Rong-An Inc., which came into the spotlight more than two years ago after applying for fishing licences.
The application had come under fire from local fishing companies who feared that the industry, already facing problems from over-fishing, will be further threatened.
Patterson had disclosed that “Falls” is registered to Chinese nationals who applied for fuel importation licences. The approvals are pending.
The company had also applied to build a wharf with provisional approval granted.
The Minister said that engineers of MARAD reported that the wharf was not constructed in accordance with plans submitted. The GEA has also been informed.
Patterson made it clear that “Falls” will have to fix the wharf problem, which extends some distance into the Demerara River, before his Ministry starts to review anything else.
The construction had raised eyebrows, with at least eight large storage tanks already constructed, and wharf facilities almost in place.
Patterson had said that from his understanding, the company came here initially to conduct fishing activities and was intending to use the fuel facilities for the vessels it would have brought here.
In 2013, Rong An launched a US$4M shipyard at Coverden.
Zhanghao Shipyard is reportedly owned by Tresey Su, who is also said to be heavily involved in the logging and mining industry. Su is said to be a naturalized Guyanese.
The issue of the export licence would be significant, as GEA is under scrutiny for its management of the country’s fuel importation business.
Ex-staffers and Government officials last week expressed concerns, saying that despite what is being portrayed by GEA, not enough is being done to stop illegal fuel.
The smuggling is so bad that more than half of the fuel being brought in is believed to be illegal, with no Excise Tax paid.
This means that Guyana is losing billions of dollars each year from fuel smuggling alone.
Guyana has been charging up to 50 percent in taxes on fuel purchased.
Fuel is reportedly being brought in by modified fishing boats, and even from the bigger vessels anchored away from the ports and known areas.
The ex-staffers also alleged that stolen fuel markers from GEA, used to track legal fuel, have helped the country lose billions as the fuel is sold by some gas stations and even taken to the gold mining and logging camps.
There are also questions about shipments of fuel for GuyOil on board a tanker that also had diesel for a private importer.
GEA’s new Board of Directors this week started to investigate a number of the complaints and has asked Chief Executive Officer, Dr. Mahender Sharma, and his staffers to provide details.
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