Zambia embarks on Fuel Marking

Wed, 14 Feb 2018 10:36:03 +0000

By KWALI MFUNI

 FUEL marking is finally here!  This should be music to the ears of fuel consumers as it ushers in a new era that spells doom for fuel adulteration commonly known as “changanya.” This initia-tive, which is being implemented by the Energy Regulation Board (ERB) is a major milestone in not only curbing fuel adulteration, but also prod-uct dumping in Zambia.

It is envisaged that while Fuel Marking shall commence in February 2018 by way of “dosing” products at different strategic locations, monitor-ing inspections shall start about two to three months later.

This is to allow for products to be marked and for the marker to filter through the pe-troleum supply chain.

The promulgation of the Energy Regulation (Pe-troleum Marking and Monitoring) Regulations ef-fected in 2017 paved way for implementation of Fuel Marking.

The Statutory Instrument (SI) pro-vided for the ERB to undertake Fuel Marking, which will be financed by a charge that is already imbedded in the current fuel price.

Announcing the Fuel Marking in Zambia on Tuesday 6th February 2018 at a stakeholders’ meeting, the ERB Executive Director Ms. Langi-we Lungu noted that suspected incidents of fuel adulteration had been difficult to conclusively tackle under the old system which was not fool-proof.

However, Ms. Lungu observed that the ERB had noted discrepancies regarding kerosene sales as research findings had shown inconsistencies be-tween the uplifted and sold kerosene stocks. She noted that this suggested that kerosene could have been used to either adulterate fuel or indeed be linked to illegal fuel vending.

It was however difficult for the ERB to conclusively eliminate suspected adulteration cases as tested samples met the set specs under the old less stringent testing methods used.

“This challenge will however be a thing of the past with Fuel Marking as the testing mechanism is very precise and can detect up to one parts per billion. This essentially means that even minute quantities added to a product would be detectable under Fuel Marking.”  Ms Lungu said.

She explained that the process of Fuel Marking entailed the addition of an invisible bio-chemical substance to all legitimate fuel sold in the country. The ERB shall in turn rigorously monitor for the marker at various points along the petroleum sup-ply chain including filling stations, tankers, depots and storage facilities countrywide.

Fuel Marking Objectives and Benefits

Fuel Marking is an intervention that has been successfully employed in various parts of the world with notable benefits particularly with regard to Government revenue collection and improved product quality.

Once Fuel Marking is implemented, all products intended for the Zambian market will be marked with an invisible bio-chemical marker at points of entry and other designated points such as Gov-ernment depots. Implementation of Fuel Marking will address many challenges in the fuel supply chain and has the following objectives/benefits:

• Prevent fuel adulteration or “changanya” which appears cheap in the short term, but is actually more expensive in the long run. This is because vehicles and machinery that use such fuel are bound to have mechanical problems;
• Detect dilution and smuggling of petroleum products which has lately been on the rise, with smuggling being wantonly conducted in towns like Nakonde;
• Improve the quality of petroleum products and guard against contamination;
• Guarantee maximum revenue on all petroleum products for the Government;
• Level the playing field for all so that duly regis-tered entities operating within the law are not cheated out of business as those engaged in ille-gal activities get more profit; and
• Among other benefits, Government shall gener-ate sufficient revenue from the sale of petroleum products while Oil Marketing Companies (OMCs) shall provide acceptable quality petro-leum products.

The Fuel Marking Procedure

Marking of fuel will only be conducted by Au-thentix Inc. a company that won an internationally floated tender to conduct this exercise. The Fuel Marking procedure would be conducted as per de-tails outlined below:

• An invisible marker will be added to all legally procured petroleum products for both domestic consumption and export at designated locations which include all Government and OMC de-pots;
• All imported fuel for domestic consumption in-cluding Low Sulphur Gas Oil (LSGO) will be marked at the point of discharge or the nearest designated marking depot;
• Marker dosing will be done by dispensing a small quantity of designated marker directly into the storage compartments of the road or rail tankers prior to dispatch into the market;
• Unique non-launderable markers with unique signatures “fingerprints” shall be used for petrol, diesel and kerosene;
• Marking shall be done in the presence of a li-censee and a “Marked Product” certificate will be issued;
• All products will be marked except jet A1 which has been excluded in order to conform to international requirements for that type of fuel; and
• A different marker will be used for each petrole-um product.

Monitoring of Product Quality

Monitoring for marker concentration, which will help to detect malpractices, will be done at various points in the supply chain such as:

o Filling stations

o Bulk depots

o Road and rail tankers

o Consumer sites

The key outcomes from monitoring compliance to the programme would be as follows:

• Promptly establish legal or illegal fuel – pres-ence or absence of the marker will identify a le-gal or smuggled consignment;
• Fuel Marking will also help establish an adulter-ated, inferior or below spec product. The level of adulteration can be accurately quantified; and
• Smuggled/transit fuel that may have been dumped will also be detected and accurately quantified through Fuel Marking.

Fuel Marking Testing and ERB Inspector Powers

Fuel marking will provide for an allowable error margin to cater for unforeseen circumstances. However, it was emphasised that any readings less or more than the allowable margin would at-tract regulatory attention as this could be indica-tive of tampering.

In such instances, affected parties would be called upon to explain why the marker concentration is less or more than expected. The turnaround time for such issues would be prompt as Fuel Marking accurately tests to one parts per billion (ppb) any additives regardless of the quantity.

ERB would penalise those found wanting by in-stituting enforcement action against the erring par-ty. The sanctions shall include fines, quarantining of affected stocks, license suspension and ulti-mately revocation of the licence.

The ERB would conduct on-spot checks using portable analysers that would be used to obtain results instantly. This shall be complimented by la-boratory analysis using Gas Chromatography – Mass Spectroscopy (GC-MS). This is a world-wide recognised technology that is used to pro-vide reliable and conclusive evidence in court and prosecution proceedings.

ERB Inspector Powers

In order to effectively implement Fuel Marking ERB officers shall have the following powers as provided by the SI:

• Inspect both licenced and unlicensed facility and take samples of petroleum product for verifica-tion and analysis;
• In conjunction with law enforcement agencies, seal off a licensed facility which is kept adulter-ated, unmarked, over marked, non-conforming or dumped petroleum products;
• Impound a transporting unit that the inspector reasonably suspects to contain a non-conforming petroleum product;
• Make a copy or extract of a document relating to the loading, handling, offloading or delivery of a petroleum product;
• Break any seal on a road tank vehicle for the purposes of taking a sample and thereafter affix a seal and record the seal numbers; and
• Order the cessation of operations of a licensed facility or site in which adulterated, unmarked, over marked, non-conforming petroleum prod-ucts is stored or kept;

Notwithstanding the powers of an inspector, a person may, in writing to the Board, dispute the results of a test of a petroleum product within 24hours of receiving the results. Procedures when disputing the test results have also been outlined in the SI.

CLOSURE, QUARANTINE AND DISPOSAL

Where need arises, the Board may order a licensee in possession of non-conforming petroleum prod-ucts to do the following:

• Close or quarantine the facility in whole or in part; and
• Dispose or blend the non-conforming product. Disposal shall be in accordance with Zambia Environment Management Agency (ZEMA) re-quirements.

REOPENING A CLOSED FACILITY

A closed facility maybe re-opened or de-quarantined upon the board being satisfied that:

• The non-conforming product has been disposed of or blended in accordance with the directive of the Board; and
• ZEMA and Zambia Revenue Authority (ZRA) have no objection to the re-opening/de-quarantining of the facility.

FUEL MARKING OFFENCES

For effective implementation of the Fuel Marking programme some activities will not be allowed such as:

• Marking a petroleum product without the au-thority of the Board in accordance with the regulations;

• Being in possession (in person or premises) of an approved marker without lawful authority;
• Facilitation of unlawful possession of an ap-proved marker by any person;
• Sell, distribution, transportation or cause to be sold, distributed, transported an adulterated, unmarked, over marked, non-conforming petroleum products to public;

• Adulteration or causing adulteration of petrole-um products;
• Dumping or causing the dumping of petroleum products;
• Keeping or maintaining adulterated, unmarked, over marked, non-
• conforming petroleum products;
• Cutting, breaking or otherwise interfering with a seal applied to a licenced facility without the au-thority of the Board or Marking Company;
• Being in possession (in person or premises) of non-conforming or adulterated petroleum prod-ucts (i.e. unmarked, over marked or under marked); and
• Offloading or removing petroleum products from a facility that has been sealed off without the prior written authorisation of the Board.

 PENALTIES

A number of sanctions have been prescribed for those found with non-compliant products as fol-lows:

• The Board shall suspend or revoke the licence of a licensee found in possession of or selling, distributing transporting non-conforming petro-leum product;
• A person who commits an offence under these Regulations for which a penalty is not provided is liable, upon conviction, to a fine not exceed-ing one hundred thousand (100, 000) penalty units or to a term of imprisonment for a period not exceeding two (02) years or to both; and
• The Board shall suspend or revoke the licence of a licensee convicted of an offence.

Awareness Campaign

The ERB is embarking on vigorous awareness campaigns on fuel marking that will extend coun-trywide. Players and stakeholders in the energy sector and the general public will be engaged at different levels. The messages will be focused on how Fuel Marking works as well as its many ben-efits including high quality fuel on the Zambian market.

Awareness activities will include programs through the print and electronic media. Adverts will also be posted on various media platforms throughout the country. Of particular interest will be areas that are problematic with regard to smug-gling and compliance to legal requirements.

ERB will work in collaboration with other regula-tory agencies such as ZRA, ZEMA, Zambia Bu-reau of Standards, Zambia Police, local authorities and Competition and Consumer Protection Com-mission, among others, on this issue.

Conclusion

It is worth noting that Fuel Marking has been implemented in various parts of the world to safe-guard the integrity of fuel quality and guard against vices such as fuel smuggling and dump-ing. African countries that have implemented fuel marking include South Africa, Kenya, Ghana, Cameroun, Ivory Coast, Swaziland, Tanzania, Uganda and recently the Democratic Republic of Congo.

Fuel Marking will help address challenges of poor quality which apart from depriving Government of revenue also disadvantages legitimate industry players and adversely affects the motoring public.

*The author is Manager Public Relations at ERB. For more information on this matter interested parties and members of the public are encour-aged to call the ERB Toll Free line 8484 or visit the ERB website www.erb.org.zm