Energy ministry set to contract a private firm to monitor oil imports

The Ministry of Energy wants to license a private firm to carry out the critical role of quality assurance of fuel that enters the country, relegating the accredited government standards agency which has been doing the work, Daily Monitor has learnt.

The plan comes five years after a State House directive forced the ministry to abandon using a private firm because it had failed to effectively carry out its monitoring role, hence making the country a home to smuggled, adulterated fuel and fuel products which are a danger to the environment.

The firm, Global Fluids International, has been supplying marker to use by UNBS in quality assurance of fuel, making at least 40 per cent of the whole programme.

Now, the Energy ministry has decided to expand and extend the company’s contract with fresh conditions, albeit without advertising.

Unclear intentions
This move, according to sources within the Ministry of Energy and Uganda National Bureau of Standards (UNBS), has been underground with no clear intentions as to why such a huge contract should not be advertised internationally in order to meet the required standards and avoid causing suspicion.

Sources have revealed to this newspaper that under unclear reasons, officials from the Petroleum Supply Department of the Ministry of Energy have proposed that come November 2012, they will hand over the bio-code and fuel marking system back to the firm as had been before.
“The contract has already been signed even as the memorandum between the Ministry and UNBS still stands until December 2013,” one of the sources said.

Meanwhile, none of the concerned officials in both agencies is free to discuss why such an action is being taken, and what reasons could force government to spend on such a hefty work when it has accredited standards bodies.

Commissioner Frank Tukwasibwe in-charge of petroleum supplies at the ministry asked this newspaper to get more information from its informers, while Dr Ben Manyindo of the UNBS said he did not have any such information.

“What I know is that until now, UNBS is doing that work, and our people are stationed at border points checking the fuel. Maybe for such information you could cross check with the commissioner of petrol supply department,” Dr Manyindo said.

If this is effected, it means government will have gone against an earlier directive from President Museveni that government agencies take over the responsibility. The arrangement of having again a private firm could also see URA lose revenues because like it was in the 90s, it could be hard for a private firm to be regulated.

Efforts to get a comment from Trade Minister Amelia Kyambadde were fruitless as calls made to her phone went un answered and the text message sent was not replied. However, her junior Minister James Mutende, who was in Mbale at the time of the call, said he would cross check since he did not have the information at hand.

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The background.
Since 2007, there has been an improved monitoring of quality of fuel coming into the country. The Ministry of Energy together with UNBS, has seen at least 30 per cent of each company’s retail network being monitored and the level of adulteration reduced from the 29 per cent to 3.2 per cent as of August 2012. Under the current arrangement, all oil marketing companies have been paying Shs5 per litre of fuel imported and this has made the system self-financing. However, with the new system, sources indicate that the money will rise to Shs10, yet the Ministry had initially rejected UNBS’ proposal to increase the charges to Shs7. This means that the staff UNBS has recruited to do the job could lose their jobs.