Home Letters Is costly biometric marking of fuel by GEA still necessary?
The Guyana Energy Agency introduced the biometric marking of all imported fuels under its previous head, late Mr. Joseph O’Lall, circa 2003, in an effort to combat fuel smuggling. The existing condition then was that fuel sold on the markets of Trinidad and Venezuela was heavily subsidised by their respective governments, and sold very much cheaper than the regular export market prices. Fuel smugglers capitalised on this disparity in prices and, in collaboration with locals in Trinidad and Venezuela, smuggled the subsidised fuel into Guyana and undersold the legitimate suppliers, who bought their fuel from those countries’ refineries at the regular Platts market pricing.
The Guyana Energy Agency (GEA) in its effort to identify and curb fuel smuggling, introduced the marking of all fuels imported by authorised dealers with a biological marker, hence any fuel found without this biometric marker would be illegal. This biometric marker came at a cost, which GEA charged to the oil companies, and they in turn factored this into their selling prices at the gas stations.
Rewind to present day conditions in Trinidad and Venezuela with respect to fuel supply, and the situation is now totally different. Trinidad has closed down its refinery and is now importing all its fuel requirement for local consumption and export. It has removed the subsidy, and all its fuels are now sold at market prices.
Venezuela, on the other hand, has gone through a complete reversal: from having fuel being smuggled out of their country to fuel now being
smuggled into the country due to the tremendous shortages caused by dysfunctional refineries.
Clearly, the situation no longer presents itself as a primary source for fuel smugglers to operate in these two countries; therefore, we should ask the quintessential question whether fuel smuggling is still a threat to legitimate dealers. If our review shows that it is not, then we should do away with the biometric marking system and its associated cost on the price at the pump.
There is an old management anecdote told about relevance when the House of Commons in England was painted centuries ago. A guard was posted outside to warn the members of the House not to touch the walls, since it was freshly painted. As the story goes, the guard was still posted centuries after the wall had dried. No one bothered to review the posting or its raison d’etre.