Probe team releases fuel report today

The saga that has been surrounding public fuel management since mid last year could finally come to an end today. A parliamentary probe team will make public a comprehensive report from a one-and-a-half month inquiry that was sparked off by damning revelations contained in the 2006 Auditor General’s report.
CHAIRED TEAM: MP Nkusi.
CHAIRED TEAM: MP Nkusi.

The saga that has been surrounding public fuel management since mid last year could finally come to an end today. A parliamentary probe team will make public a comprehensive report from a one-and-a-half month inquiry that was sparked off by damning revelations contained in the 2006 Auditor General’s report.

The seven-member ad hoc commission led by the Chairperson of the Chamber of Deputies’ Standing Committee on Economic Affairs, Juvenal Nkusi, will attempt to answer questions that have been on many people’s minds concerning the acquisition and management of the nation’s fuel reserves.

On the surface, the report seems to exonerate senior Government officials previously thought to have failed in one way or another in their responsibilities – weaknesses that at one time nearly plunged the nation into unprecedented levels of fuel crisis.

“After our investigation, at least one thing became clear: there was no open theft or misappropriation of public fuel reserves. But we also found out cases of irresponsibility on the part of people who were in charge,” Nkusi told The New Times from his office yesterday. He said that if there were any intentional anomalies, they were mostly isolated.

“Ninety-eight percent of our fuel activities are in the hands of the private sector and in such a situation, it is difficult to find a minister responsible for any mess that could be in that sector,” added the veteran parliamentarian who was at one time the Speaker of the Transitional  National Assembly shortly after the 1994 Genocide.

He, however, declined to discuss details of the report, insisting that he was only obliged to release it before fellow MPs and not in newspapers.

However, The New Times managed to access a copy of the report and indeed, its publishers failed to lay blame on any single individual.

Instead, the report seems to point at collective institutional weaknesses, and makes recommendations that could result in massive reforms in fuel management issues.

Generally, the report suggests that Rwanda has hitherto not considered petroleum products as an energy issue but rather a commercial one.

As such, the inquiry points out that the unit in charge of petroleum products in the Ministry of Commerce and Industry (Minicom) is understaffed and lacks the necessary support to oversee the movement of strategic fuel stocks.

The report states that while on paper the unit – created last year – should have at least five people, it currently has only two people who are overloaded with other official assignments.

The 87-page report reveals that former Commerce Minister Protais Mitali – now Youth Minister – told the probe team that the official who is in charge of strategic fuel stocks is at the same time responsible for overseeing foodstuff strategic reserves.

Such weaknesses, coupled with other loopholes, are largely blamed for the early 2006 scenario when the whole country at one time had a paltry 2.4 million litres of fuel, a situation that necessitated officials to overlook procurement rules and bought millions of litres from Dalbit Petroleum, a Kenyan oil company.

The report shows that both Mitali and the Finance Minister James Musoni, (formerly Commerce minister) admitted that the Dalbit deal did not go through the normal channels, although they insisted that the deal was struck in the interest of the nation.

It is estimated that the country consumes between 17 million and 20 million litres of fuel a month, or between 500,000 litres and one million litres a day.

And considering that the country’s strategic fuel facilities – in Gastata, Kabuye, Rwabuye and Bigogwe – can stock only 30 million litres at once, the MPs have made the construction of more storage facilities one of their top recommendations.

“We need to have more strategic reserves so that when the planned oil pipeline (from Eldoret in Kenya via Kampala and then Kigali) is completed, we can ably store that fuel,” the report reads in part.

The MPs have also suggested that fuel management issues should cease to be a responsibility of Minicom and be placed in the hands of the Infrastructure Ministry which normally oversees energy issues. By doing so, they believe fuel issues will receive more attention from energy specialists.

The probe team suggests that Minicom should only handle the commercial aspects of petroleum products, but should be relieved of daily management of fuel stocks and rehabilitation of reserve stores.

“In neighbouring countries such as Kenya and Uganda, fuel management is strictly under the Energy ministry; that is how we should be handling this issue because fuel is a sensitive issue that goes beyond just business considerations,” a member of the team said on condition of anonymity.

Nonetheless, the MPs recommended that the duties of both ministries in as far as public fuel issues are concerned should be clearly defined, especially since the Commerce ministry has a bigger say in fixing prices.

The commission has also called for a policy on petroleum products which they believe will help give fuel issues the attention they deserve.

The inquiry apparently confirmed all the irregularities highlighted in the AG’s report, including cases of delayed payments by fuel debtors, lack of follow-up on the part of Minicom, and issuance of bounced cheques by dealers who took public fuel on credit.

For instance, the inquiry confirmed that businessman Alex Rubayiza, who took public fuel on loan worth Frw18, 293,143, issued a dishonoured cheque on November 9, 2005, but no official got wind of it until the AG’s office brought it to Minicom’s attention during its audit in August 2007.

But the MPs’ probe also established that some dealers’ cheques expired due to bureaucratic delays in creation of special bank accounts on which some payments are supposed to be deposited.

In particular, the report indicates that even after Rubayiza had paid a genuine cheque twenty days later, the AG could not find evidence of payment since the account on which he was supposed to deposit the money had not been opened at the time.

Instead, Rubayiza’s money had been put on the State Treasury’s account in the National Bank of Rwanda (BNR). And since Rubayiza’s fuel loan had been got from a Japanese Government fuel grant, both Mitali and Musoni confirmed that by the time of the AG’s audit, a specific account for the Japanese grant had not yet been created.

The MPs have also suggested that other forms of securities are necessary from people seeking public fuel on loan other than just a cheque. They also recommended that all payments should go to Rwanda Revenue Authority (RRA) and not through some Commerce ministry officials as had previously been the case. The parliamentary probe team interviewed all the key players in the fuel industry including dealers.

Ends

 

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