'Dog eat dog' business leads to smuggled fuel temptation
Stabroek News
June 25, 2004
Fierce competition among gas stations is being touted as the motivation for some dealers attempting to acquire smuggled gasoline.
Stabroek Business understands that the ever increasing number of gas stations is adding pressure to existing operators resulting in falling margins as operating costs increase.
According to sources, some stations, particularly those located on the Essequibo Coast, sell as little as 50 gallons per day, leading to the temptation to stock illegally acquired cheaper fuel. These stations also have easier access to fuel smuggled from Venezuela.
Recently the Guyana Energy Agency (GEA), following tests on fuel in tanks at an East Coast Demerara gas station, ordered it closed after some of the stocks were allegedly found to be contaminated.
The GEA action stemmed from what this newspaper understands was surveillance of a truck by the Department of Customs and Trade Administration.
Legal action is expected with the likelihood of a hefty fine along with a jail term for the owner and withdrawal of his licence.
A source close to the industry told this newspaper that the fuel business which on the surface seems to be a good investment is really a 'dog eat dog' operation as each station looks to outdo the other.
The government last year commenced efforts to stem the flow of smuggled fuel by instituting a fuel marking mechanism.
Since the beginning of the fuel marking operation, there have been repeated calls from both Prime Minister Samuel Hinds and GEA Head Joseph O'Lall for operators to clean up their act or risk facing harsh penalties.
However, it appears a small number of operators continue to deal in illegal stocks. Most are in remote communities not easily accessible to monitors. The source says the number of gas stations being opened needs to be carefully monitored and regulated to ensure that they do not saturate the market. He sees the current high world market fuel prices as also impacting negatively on the sector causing greater strain on legitimate operators and dealers.