LESSONS FROM GHANA - THE FUEL MARKING PROGRAMME
“NO man is an island,” is a common adage we hear all the time in our daily lives. It emphasises the need to seek counsel from others in pursuit of attainable goals.
This is true especially for countries as well. No country is an island when it comes to matters of economic development that are already being implemented successfully in other countries.
With this in mind, the Energy Regulation Board (ERB) set out on a study tour to Accra, Ghana. The mission was to learn from Ghana the success story of Fuel Marking that has been in effect for the past six years in that country. Ghana started the Fuel Marking Project in 2012 and has recorded incredible results in curbing smuggling and dumping, levelling of the playing field, increasing of tax revenue from petroleum products and reducing incidents of adulteration.
To this effect the ERB intended to learn from the Ghana energy regulator National Petroleum Authority (NPA).
The Zambian government, through the ERB, has embarked on a Fuel Marking which entails adding a marker to all fuel that is sold and used in this country.
Adulteration of fuel which compromises the quality of fuel sold in Zambia shall be minimised once the monitoring and enforcement exercise commences. Over the years, the ERB has had many complaints on quality of fuel from consumers. The Fuel Marking exercise is therefore intended to ensure only good quality and unadulterated fuel is sold in this country.
This should be like music to the ears of motorists and all fuel users. Repeated costs for repairs of motor vehicles and machines due to bad fuel shall be a thing of the past while importation of spare parts shall surely reduce.
As has been emphasised before on this column, Fuel Marking shall help curb illegal fuel vending, smuggling/dumping and adulteration leading to increased revenue in taxes, better quality fuel and a level playing field for industry players. The importance of payment of correct taxes to government cannot be overemphasised.
At the NPA offices in Accra, the ERB team was briefed that an American Company, Authentix Inc., had been hired to conduct the Fuel Marking exercise in the former Gold Coast.
Initially, Authentix worked with SGS Limited as a sub-contractor to do the actual marking of the fuel when the project commenced in 2012, while the NPA took up the monitoring and enforcement of marker concentra- tion levels. Currently, Authentix is working with a local Ghanaian company called National Technologies Limited (NTL) that took over the sub-contract for marking from SGS.
The NPA revealed that adulteration of fuel stood at a staggering 32 percent when the exercise commenced in 2012. But today, that has been reduced to about 1 percent of all the fuel consumed in Ghana.
Further, about 500 million Cedis (about K1.1 billion) each year has been realised from taxes from legitimate unadulterated fuel sales.
The NPA stated that offences emanating from breach of the Legislative Instrument (LI) provision on fuel marking were dealt with through administrative sanctions.
Offending service stations or oil marketing companies cannot operate when found guilty until fines are paid. The ERB was availed an opportunity to visit the Tema Fuel Loading depot where fuel marking is undertaken by the NTL.
The team witnessed, first hand, tankers of fuel uplifting the product which was later marked before dispatch for the market.
Once a tanker loads at the depot, it is assigned a colour code which is displayed on the wind shield specifying whether the tanker is to be marked or not depending on its intended use. After marking, each marked tanker is allocated a certificate.
The certificate produced and issued by the NTL has a unique generated number. The certificates, which are in duplicate, are signed by the driver and marking officer in the presence of the relevant oil marketing company.
It is worth noting that the marker has similar properties as the fuel and does not change the product which is marked in any way. The colour of the product equally does not change.
Prior to witnessing the marking process, the ERB delegation visited the NTL offices where the markers are kept under lock and key. The process of releasing the marker to the loading and marking depot is meticulous with the quantity of markers released carefully recorded.
The marked product once distributed to service stations is subsequently tested by the NPA through its Field Officers. Ghana is divided into four regions for the Fuel Marking project: Accra-Tema, Kumasi, Volta and Takoradi.
Each region has its own Fuel Marking team of two field officers and a driver who conduct tests for the presence of the markers at least once every month with the exception of the festive period month of December.
Specially designed vehicles equipped with Authentix detectors are used to conduct random checks at service stations. All drawn samples are sealed, labelled and counter signed by the dealer’s representative. One sample remains with the service station.
Products that are suspected to be non-conforming are taken to the NPA central office for further testing and confirmation of the result.
Once indicative results are obtained for each sample in the field, further tests may be carried out if the product was either a “suspect” or a “fail” at the laboratory at NPA.
The ERB team also witnessed sampling of product at a local service station in Accra and observed the generation of results. The tested samples found to be on spec and therefore required no further tests.
A point worth noting is that the most expensive fuel product is around an equivalent of K10 (Zambian Kwacha). This is despite Ghana having its own oil wells and being at the coastline for easy importation of oil.
The ERB team also witnessed testing of samples in the laboratory at the NPA headquarters. The testing equipment there is more advanced and able to perform higher level tests.
The NPA demonstrated that fuel quality complaints had reduced drastically following commencement of the Fuel Marking exercise in Ghana.
For instance only two complaints had been recorded since January 2018. This showed a major decline in complaints which were in double digits prior to implementation of Fuel Marking.
With Authentix’s track record in Dallas, Texas in the United States, Philippines, Mexico, Serbia, Uganda, the Democratic Republic of Congo and many other countries around the world, it is not a surprise that the Fuel Marking project in Ghana provides key lessons for countries embarking on Fuel Marking.
The NPA proudly and boldly declared that it had won the “confidence and trust” of the Ghanaian people with the project. However, it has not been all rosy when it comes to complaints handling. For example, when a fuel quality complaint is reported late, the affected batch may have been depleted at the affected service station, thereby making it difficult for NPA to follow up the matter.
It is reassuring that service stations in Ghana are encouraged to install CCTV cameras in order to capture activities at the service station. Customers are equally encouraged to send video messages via WhatsApp of incidents related to fuel quality complaints.
Similar to the ERB’s Toll Free Line 8484, NPA also has a Toll Free-Line TFL with dedicated staff to operate the same.
In addition, two mobile phones are available for purposes of reporting complaints on a 24 hour basis. The employees of NPA also have a website with interface for Facebook and Twitter which helps to enhance communication channels for complaints related to fuel quality and fuel marking, in particular.
The NPA also works closely with the Ghana Standards Authority in authenticating complaints of fuel quality.
The study of the Ghana Fuel Marking project was an eye opener for the ERB as Zambia embarks on its own project. Since February 2018, the ERB, through Authentix who have sub-contracted SGS Limited, have been marking fuel in the petroleum sub-sector. By June/ July this year, it is expected that all the fuel in circulation in Zambia shall be marked.
Against this background Zambia is poised to benefit from Fuel Marking as other countries including Ghana have.
Rome was not built in a day. The Fuel Marking exercise may not be done in a day in Zambia but once it is fully operational, benefits shall accrue for the good of all Zambians in all economic and developmental endeavors.
Ghana and other countries around the world are benefitting immensely from fuel marking and Zambia cannot afford to lag or be left behind.
*The author is Consumer Affairs Officer based at Head Office in Lusaka. For comments and clarifications kindly email erb@erb.org.zm or call the ERB Toll Free Line 8484.