Sol denies claims of abusing fuel exemption system

– says 3rd party verified fuel imports, compliance with law

Sol Guyana, which was fingered in correspondence between Guyana Revenue Authority (GRA) Commissioner General Godfrey Statia and Finance Minister Dr Ashni Singh about an alleged fuel scam, has come out in denial of the allegations against it.
In a statement on Sunday, Sol made reference to its core values which include “integrity” and noted that they have robust procedures in place to ensure that they comply with the law and corporate social responsibilities.
According to the fuel company, it has been working closely with the GRA in this regard. It also claimed to have been cleared by an unnamed third-party verifier and said that allegations of it abusing duty exemptions are false and damaging.
“As part of its assurance process, Sol has commissioned an independent third party to conduct a verification and reconciliation of its duty position, which confirms Sol is current and compliant with duty exempt importation regulations,” the company said.
“Sol is proud to be a safe and reliable supplier of fuels and energy solutions to the people of Guyana, and will vigorously defend the strong reputation it has built over many years against libellous and damaging statements.”
GRA has a system in which large-scale fuel companies would act as distributors, importing fuel and then receiving tax exemptions for fuel it sold to various businesses that were eligible for partial or full exemption – businesses that included foreign investors.
But according to Statia in a letter seen by this publication, checks by GRA’s Law Enforcement and Investigation Division (LEID) showed that these distributors were only delivering part of the fuel to these companies, even though the distributors were clearing the fuel at the duty-free rate using the companies’ tax exemption letters.
In the letter, Sol was named as one of these offending companies. Statia revealed that this was occurring as late as 2021, whereby fuel was imported for oil companies but the companies did not receive much of it.
As a consequence, the distributor owed over $2.6 billion worth of taxes for the non-delivered fuel. This sum is currently under review and awaiting a final decision. It is understood that this abuse of the system, with regards to oil imported for oil companies, dates back as early as 2015.
The Commissioner General further revealed that for the period of January 1 to September 30, 2020, one prominent distributor imported close to 35 million litres of oil on behalf of a company in the extractive industry, using that company’s tax exemption letter.
However, the records submitted by both companies revealed that only 20.6 million litres of oil was ever delivered. According to Statia, based on the reconciliation, it was found that the distributor owed $606.9 million on the 13.8 million litres of oil it did not deliver for the intended purpose.
It was further explained than when GRA wrote to the company, it accepted liability but claimed that it had previously supplied more than 24 million litres of duty paid fuel at a duty-free price to the particular extractive company, without exemption letters. Checks by GRA could only account for 20.3 million litres.
“GRA should find a way to prosecute the company, and recover duties and interest applicable based on the abuses. I am therefore of the view that the Attorney General’s opinion should be enlisted in considering the way forward,” Statia advised in the letter, which was copied in emails to President Dr Irfaan Ali, Vice President Bharrat Jagdeo and Attorney General Anil Nandlall, SC.