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Thursday, December 2, 2021

Letters: On the petroleum saga

Letters: On the petroleum saga

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The Petroleum saga has raised more questions than answers about the new Gambia. The issue of corporate governance, cronyism, poor procurement practices and corruption are at the heart and soul of this saga.

The figures circulating on social media detailing the amounts outstanding need proper scrutiny and interpretation for the general public to understand what is at stake and the exposure of Government vis a vis revenue of GamPetroleum and taxes for the Gambia Revenue Authority. For starters, Gambia Petroleum Company is a storage company that stores fuel for importers, distributors and offshore traders. Their income is derived from revenue generated in the form of THROUGHPUT FEES from vessels discharging products into the storage facility and tanker trucks lifting products from the depot.

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The figures on the table clearly depict a negative balance by most bussineses in the sector. A negative balance exists once the stock owned by a particular company is exhuasted and the depot extends product to them with a view to replace. This assumption has been an age old practice as a strategy to efficiently manage haulage in a comingled storage facility. What do I mean by this? In a nutshell, it implies that all products inbound for Gambia are stored in same tanks for all importers and the issue of haulage management is critical in order to avoid disruption of the local supply chain and stockouts. Based on my knowledge of the sector, it is safe to say that the minus incurred by the market participants (oil marketing companies) can be drawn down over a period, so long as they remain to be in the business of oil marketing. Was the practice of giving product to other marketers a good one? Well the answer is yes with a caveat. It is a good practice to offlend products to others in order to create storage space (haulage) so that bigger hauls can be brought in by importers thereby making their parcels economically viable for shipment. The downside of the existing arrangement is that it lacks proper scrutiny and risk mitigation to secure the owners from financial exposure.

As stated earlier, the deficit of good corporate governance is at the heart and soul of this saga. For far too long, people are placed in Boards without the requisite knowledge to add value in the companies they represent. Instead they become dead weight cost. Government must take the issue of board selection seriously if they want our public enterprises to be functional. Equally, the regulator (PURA) must understand their role and remain neutral. PURA must allow the sector to do their own reconciliation and report the final outcome to PURA for a determination to be reached. The current role being played by PURA is rendering the regulator ineffective and must desist from any semblance of a cozy relationship with the sector.

Poor public procurement has contributed to the lapses in this saga. Government by way of GNPC are complicit in awarding GACH Oil a contract to supply petroleum. GACH has no experience in the sector nor do they have the financial muscle to participate effectively in the sector, hence the reason they opted to borrow product from the depot pending importation. This administration over the years has facilitated the awarding of contracts to players who have limited expertise in the areas they are intervening. Their only qualification is proximity to power. The NAWEC heavy fuel contract and the GNPC light fuel contract are both awarded to people close to the corridors of power.

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The incident hands of the Gambian oligarch are all over government contracts with the help and assistance of public servants who do their bidding.

Finally, I will conclude by stating that this current administration is more of a liability to Gambians than a redeemer of our woes. Allowing Barrow another term in office will be an endorsement of bad and wilful behaviour.

Nyang Njie

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