33.2 C
City of Banjul
Wednesday, May 22, 2024

Fuel shortage – An outcome of favoritism or capricious policies?

- Advertisement -
image 28

This country seems, for a long time, mesmerized into inaction while inappropriate events of bad governance are the lullaby that keeps the entire nation in an uncomfortable silence. It is a silence that further infects the institutions to have supported accountability and transparency. Corruption is rife in the country and has been a drumbeat into the ears of the nation, nationally and internationally.

The inertia in our society is suicidal. From the National Assembly to the various national institutions that are required to influence the balance of power and oversight, the silence on bad governance, corruption, poor management of resources and a long list of governance taboos is simply deafening.

As a member of the National Assembly, I point a finger first at my own institution. As a body representing the people who voted us in, the attitude of working together for the common good has decayed into the individuals in pursuit of individuality based on sentiments and party lines. The Assembly has various working committees that are relevant to almost every aspect of development issue. We have yet to shout out the level of corruption that overhangs on the reputation of our emerging democracy. A loss of confidence in the governance system of a nation is a costly outcome of poor governance, particularly corruption.

- Advertisement -

The lone voice of individuals and activists is the only blessing in support of the people in defending the rights of the general population of the Gambia. The year 2021 will certainly be remembered for the occurrence of certain milestone events and perhaps even omens. It is an election year and a very competitive one too with lots of applicants vying for the presidency though with a fewer number of applicants on the shortlist for the ballot box. That sounds straightforward for any democratic country.

However, the year seems to be witnessing events that put the country on the radar of international (or at least regional) attention. The country location is becoming a focus of cocaine trafficking. Two hauls of this dangerous drugs are linked to the country.

The more recent one is more worrisome. A boat has been painted and converted into a so- called cruise yacht only to be impounded by Senegalese authorities with approximately two tons of cocaine. Persons involved in the matter have raised eye brows and the nation anxiously awaits the final outcome of the case as to who is actually involved. The frequent visit of a black tinted glass Pajero to the yacht has caught the attention of all and sundry. In all cases of huge hauls of drugs, money laundry is major outcome of the sums of money derived from them.

- Advertisement -

A more recent existential threat to our economy emerged with the bizarre shortage of fuel. The stories that emerge from this episode of omens are like a self styled mafia dominance of national economic transactions. The similarity in that aspect may be unkind but the coincidences of events are too alarming.

First, the President visited the Mandinaring fuel depot making a statement that seems to be a casual message of opening up the market to more Gambian participants. A few months thereafter – enter the person of Aboubacar Jawara, the importer of a controversial hunting semi automatic guns, the exporter of the national “black sand” and a familiar face in the President’s team of supporters.

Mr. Jawara’s GACH offered a whopping discount of $65.00/MT on the Gambia Government Price Structure compared to $40.85 of PSTV, a much experienced supplier with bigger capacity. This raises serious concerns about the ability of Mr. Jawara’s GACH to deliver under normal business.

Experience and knowhow are an important factor in undertaking certain economic activities. Trading in commodities can be a very complex matter. The price of fuel is of course not stable. It fluctuates over a period and experience operators are mostly able to predict the trend. A novice in the business for such a security sensitive commodity can be easily unmindful of the influence of the weather on the price. As certain global consumers of fuel, such as Europe, get closer to the winter season the price of fuel certainly goes up. The heavy price discount would be a heavy price to pay.

As if birds of a feather flocking together, another neophyte company in the field of oil imports, Afri Oil of one Mr. Jabbi, joined with GACH to lift petrol from the Mandinaring depot.

Shockingly, both companies, GACH and Afri Oil, do not have any stock with the depot. The stock belongs to other importers, such as Addax and Trafigura, whose consent was never sought nor have they been informed. It is act that requires a closer legal consideration.

The owners of the stock asked for their product and a verification of their stock. That is the beginning of the end of the crisis. There was no stock. Gach has never imported any fuel into the country and thus have not provided any fuel replacement of the stock.

Was the use of someone else’s stock a way of raising some of the required funds to finance the quantity won from the GNPC tender?

Interestingly, the Ministry of Finance within the same period, in October, reduced two key components of the price of fuel. The Ministry brought down the cost of the letter of credit (LC) to make it cheaper to borrow the money to import. Would that be a deliberate preference policy in favor of an importer? It, at the same time, unilaterally and drastically, cut down the margin of the importers from US$100 down to US$70. Is that narrowing down the competition or are these protective measures for a specific importer in distress. It naturally makes it less attractive for others to bring in fuel especially when global market prices are going up.

As a miscalculation of a novice would have, the price of fuel increased. The price of light fuel (AGO) increased from US$654.61 per Metric Tonne to US$751.75 per Metric Tonne (up $97.14/MT) and heavy fuel (PMS) from US$785.23 to US$875.88 per Metric Tonne (up $90.65/MT). Thus, obvious to conclude that MOFEA changes on the price structure did not favour GACH.

Naturally, for GACH to replace the stock taken from the depot, the company would have to pay a higher price – one much higher than what it offered and sold to GNPC. The financial loss of the company is left to the imagination.

According to the regulations governing the supply of fuel in the country, a certain level of stock is required to be maintained in the country below which an emergency management would have to be put in place in order to ensure that essential services are maintained. In this case, the depletion of the stock without the consent of its owners and the failure of a newcomer into the business to provide a replenishment, has ungracefully landed the entire country in an embarrassing situation of a fuel shortage – a phenomenon that was unheard of for quite a while.

Once more the life line of the country’s economy has become entangled to a single source supplier – Senegal, instead of the tradition global market. GNPC, JAH Oil and other marketers made some overland importation from Senegal. That is quite a risk for the companies involved, considering the possibility of revenue leakage from this approach. In addition, GNPC has recently also brought in 7,500 MT of AGO and 1,209 MT of PMS and naturally at a price higher than the Government price structure that has been arbitrarily established by the Ministry of Finance. Would they be selling at a loss?

From a casual observation, the entire sequence of events has a string of coincidences. The country is now tangled in a fuel crisis just when generally, the economy is struggling under the yoke of price increases and in particular, the tourism sector is trying to recover from the effects of Covid 19.

The event is indeed one appropriate yardstick to measure the quality of government in place. The effects of a major fuel shortage in a country have untold consequences on all sectors of the economy. Rectifying the situation can be very costly. The traditional slow reaction, if any at all, from government on serious events of this nature, which includes the cocaine saga, can be very damaging to the international reputation and development partner confidence of the country.

This is all happening because of what appears to be capricious decision making, bad management and poor planning which seem to simply mortgage the interest of the national economy and the livelihood of the people of the Gambia. The country needs to wake up from our self induced slumber – and wake up indeed on December 4 for not only a change of leadership but an overhaul of a system of bad and most inappropriate corrupt system and governance.

Join The Conversation
- Advertisment -spot_img
- Advertisment -spot_img