Officials from the Ministry of Energy and Mineral Development on Thursday failed to account for the exact amount of Petrol, Kerosene and Diesel Uganda imports on an annual basis.
Appearing before the Public Accounts Committee (PAC), the Commissioner of Petroleum Supply Rev. Frank Tukwasibwe conceded that there might be an insignificant amount of fuel that sneaks through unmanned border points into the country.
“That would mean that we are not marking it in the first instance. And that is why we still have a failure rate of less than one percent,” he said.
Documents from the Energy Ministry indicate that the Busia, Malaba and Mutukula border points are the only designated entry points for fuel, a phenomenon which has exposed the other border crossings to this illicit trade.
Upon entry into the country, Tukwasibwe explained, some of these fuel products make their way to unlicensed make-shift petrol stations, further complicating their documentation and enforcement work.
He further pointed out that their work is complicated by acts of some members of the “old” single pump owners association who were never supportive of the Ministry’s move to takeover monitoring of the fuel and trade operations.
“In 2012 when we were starting the enforcement, there was an association of single pump owners and operators originally working in Kampala. When we started the enforcement, they were up in arms and yet it was an association of illegal operators if I can call it that way,” Tukwasibwe added.
This pronouncement was triggered by a barrage of questions raised by the Auditor General (AG) John Muwanga’s June 2018 Report.
In his report, Muwanga cited a discrepancy in import revenue figures generated by Uganda Revenue Authority’s (URA) ‘Asycuda’ system and the Global Fluids International (GFI) which enforces quality compliance through ‘fuel marking’.
Fuel marking refers to the “introduction of a marker into the petroleum product at a point of taxation before clearance for entry into the country”.
“There was inadequate verification and reconciliation of revenues remitted by Global Fluids International (GFI). Hence a risk of understatement of the revenue declared to the Program by GFI,” AG observed.
According to a May 2018 Memorandum of Understanding (MOU) seen by this website, GFI is supposed to do this work at a charge of Shs 26 per 1,000 cubic litres of fuel marked, exclusive of taxes.
However, legislators were incensed to learn that the entity fell short of its Shs 3.3 Bn revenue target in the 2017/18 Financial Year by 15% which grossly affected quality compliance.
“The revenue shortfall of 176,139,571 impacted on the entity’s capacity and as a result, the activity on national monitoring coverage of fuel quality for June 2018, was not fully undertaken,” the report states.
Realizing that Tukwasibwe was stuck, the Ministry’s Under Secretary Freddie Mugunga begged for more time to study this cash flow.
“I did not want to appear as if I am stopping or trying to stop the discussion. My plea is that we are repentant, let us go and put all that has been raised into order,” Mugunga requested.
Documents indicate that the net trade receivables from GFI in 2018 and 2019 were 204 million and 667 million respectively.
Relatedly, Fredrick Angura, the Tororo South Member of Parliament (MP) then asked whether there is a quality control mechanism in place to forestall proliferation of illicit lubricants.
“We are even told there are companies which are burning tyres to generate oil. Yes, they are here. They burn tyres and then add certain chemicals, recycled oil and then it goes to the market,” Angura pointed out.
In response, Tukwasibwe argued that much as they have the Quality control plan in mind, they lack necessary testing equipment.