Probe ERB inertia

Thu, 22 Jun 2017 10:44:23 +0000

THE inertia the Energy Regulation Board (ERB) has exhibited in dealing with the fraudulent activities surrounding the operations of Lake Petroleum Limited raises suspicion.

When Government experienced a deficit of fuel products sometime last year, it contracted some Oil marketing Companies (OMC) to import fuel on its behalf. 

However, effective January 2017, the ERB cancelled OMCs importation permits in order to save Indeni which at the time was shut because it was overstocked with no room for new finished products.  Only government contracted OMCs importing Low Sulphur Gas Oil (LSGO) for the mines and other specialised users were exempted from fuel importation ban.

Despite the foregoing, Lake Petroleum in connivance with some clearing agents, forged documentation to smuggle large volumes of fuel products into the country.

When alert stakeholders reported the oil importation scam, a fleet of oil tankers belonging to Lake Petroleum Limited were seized, and the ERB asked the erring OMC to provide necessary documentation indicating where it was getting the fuel from.

According to the Petroleum and Transporters Association of Zambia (PTAZ), about hundred (100) oil tankers were impounded whereas the Zambia Revenue Authority (ZRA) claims only twelve (12) were seized during a special anti-smuggling operation in Kapiri Mposhi in March 2017. Where have the other oil tankers gone? Who authorised the release of the said Lake Petroleum oil tankers? Why has Lake Petroleum continued operating?

Certainly, knowing the whereabouts of the oil tankers is a matter of public concern. It is in public interest that relevant investigative wings such as the Drug Enforcement Commission should quickly initiate investigations into the fraudulent oil importation of oil.

Stakeholders need to know how a company that was penalised by the ZRA for smuggling using forged documents has not been dragged to court. Is forgery not an offence worth pursuing?

Surely, should the investigative wings wait for President Edgar Lungu to give a directive for them to institute investigations?

If the revenue that would have been lost from the 12 oil tankers ZRA seized is in excess of K2.3 million, how much money has Government lost out in taxes on the more than 60 oil tankers whose disappearance still remains a mystery?

It is the magnitude of this economic loss to the country that key stakeholders and members of the public are seeking an explanation from relevant authorities on how oil tankers which were impounded for illegally importing fuel all over a sudden disappeared into thin air.

It is indisputable Lake Petroleum flouted section 141 and 149 of the Customs and Excise Act CAP 322 of the Laws of Zambia, hence had no option but to accordingly settle both the assessed taxes and duties including the 100 percent penalty amounting to K4.6 million. 

With this such overwhelming evidence, why has the ERB dragged its feet to take punitive measures against the oil smugglers? Why is the ERB treating this matter with kids’ glove? Is ERB equal to the task?

For as long as the energy regulator is sluggish in taking decisive action against OMCs that perpetrate illegality in the sector, people are prone to speculate why the operating licence for Lake Petroleum has not yet been revoked.

A random check on gas stations owned by Lake Petroleum Limited reveals that it is business as usual despite the ERB imposing a ban on it from distributing, importing and exporting petroleum products pending further enforcement action over its illegal importation of fuel.

The defiance with which Lake Petroleum has carried on with its operations in spite of the ERB ban undermines the very mandate and existence the energy regulator was promulgated for.

We challenge the ERB to be proactive in carrying out its mandate to safeguard not only the interests of the energy consumers but also national economic interest. Neglecting to act accordingly is tantamount to being an accomplice to the very fraudulent activities ERB is legally mandated to fight.

Alternatively, relevant investigative wings should probe ERB to establish the cause of such lackadaisical approach in dealing with OMCs engaged in fraudulent activities.