17 February 2014

Liberia's Diesel Crisis Nears End? Two Million Gallons Arrive

Monrovia — For days, Monrovia and parts of Liberia have experienced a crisis that has resulted to darkness, further compounding the already lack of stable electricity power for Monrovia and immediate environs.

The current fuel crisis on the Liberian market is affecting the operations of many entities, including the Liberia Electricity Corporation (LEC) which supplies state entities with electric power. Private generators operated on fuel have not been able to run the usual house, leaving several communities, homes, businesses and offices in darkness.

The Liberia Broadcasting System, the only state radio has gone off the air since Thursday and has been off until midday Sunday making it impossible for the Government to communicate with the Liberian public.

The Liberia Petroleum refining Company, responsible for storage of petroleum products blamed the situation on breakdown by its main supplier based in neighboring Ivory Coast.

Investigation has established that the situation is causing serious impediment to many entities with the crisis now taking a political dimension with a former head of the LPRC blaming the current management of the problem.

On Sunday, tankers were seen around the vicinity of the LPRC, offloading fuel, but it remains to see when major entities like the LEC and others will receive supply. T. Nelson Williams, Managing Director of the LPRC told FrontPageAfrica that the current supply being offloaded is a consignment of 2 million gallons of fuel.

Williams says major entities, including the LEC, hospitals, amongst others will receive first priority and during the course of today the fuel crisis will be resolved with supply available on the market.

Besides, the problem encountered with the supplier in the Ivory Coast, Williams also blames ongoing rehabilitation work at the company, which he said cannot allow for the storage of supply over a long period.

Williams says "Right now LPRC is going through a major rehabilitation and expansion project. If we had backup tanks at this time, we would have had at least two months supply; but based on the unavailability of storage capacity, we have the only capacity to have 1 1/2 tanks available for fuel. This problem will be resolved permanently at the conclusion of this project, which will be July 2015".

Following the completion of the rehabilitation exercise, Williams says the storage capacity will go from 43,000 metric tons to 69,000 metric tons, which he indicated will give the LPRC the buffer to avoid future shortage crisis. Another project he disclosed will be implemented in Ganta to help support the storage facility in Monrovia.

"We are also starting the project in Ganta, we will also have that area as a strategic reserve location; so having extra capacity will really help", Williams stated.

On the importation by companies, the LPRC MD explained that three companies are always allowed to import at a time.

"One of the issues in this case is that we had three companies bringing products at the same time. If we had one company bringing this time and another bringing behind it would have been a little easier, but we had three companies that combined to bring products on the same vessel."

"We are working on that and we will ensure that moving forward, this does not occur again. We will also have a second vessel en-route behind this vessel. We have always been on top of this in Liberia, this is an isolated incident that we don't expect to happen any time soon", Williams says.

Harry Graves, who served as Managing Director of the LPRC sees things differently as he says the situation is as a consequence of incompetent management and massive corruption at the LPRC.

Greaves says "It is so serious that companies like Arcellor Mittal have since been considering closing down the mines because they don't have fuel to operate; so you can't say it is not a crisis. This crisis could have been completely avoided; the crisis is the result of basically two things incompetent management and massive corruption at LPRC".

Greaves says the current LRC management has allowed few importers to hijack the importation market, thereby having control over the supply of petroleum products on the market.

Said Greaves: "The current managing Director T. Nelson Williams has allowed his storage terminal to be hijacked by a trail of importers. Right now there are 11 importers at LPRC but there are few importers who have been allowed to hijack the importation. Aminata, which is owned by my good friend ShakaTuray, Shrimex, Musa Bility and some people refer to them as the Mandingo mafia."

"They have been allowed to hijack the importation. This process goes back to 2012. In the most recent period, Shrimex, had requested a license to import 6,500 metric tons of diesel, which are equivalent to 2million gallons, that is about two weeks consumption."

"Every other importer who requested for permission to import were that they could not import until Shrimex brought this consignment; but Shrimex could not deliver. That is the actual reason for this particular crisis. They have been allowed to virtually monopolize the importation".

He claims that the LPRC management is giving priority to few entities which he said to refer to as the Mandingo mafia to have preference over other entities operating in the petroleum industry with some entities taking control of others supply.

Greaves Continued "If you want to keep your finger on the pulse this is like your prima, you have to have that report so you know what is there. Generally, you have to make sure you have a minimum of two million gallons on the ground at any point in time. "

"If you are down to 50,000 gallons, what it means is that you have no proper inventory control. Another thing that has happened is that LPRC management has allowed importers to take other importers' fuel".

He cited that Total is one of the importers affected by the bad management practice at the LPRC, indicating that the company is afraid to voice out for fear of retaliation.

"I give an example; right now Total is supposed to have close to 300,000 gallons of fuel a day why, because LPRC management has allowed Aminata, another importer to take Total's fuel to give to LEC. Under our law, that is expropriation. "

"The government cannot take someone else's property and give it to somebody else without that person's consent or without compensation."

"That is illegal, it is unconstitutional and it is wrong. Many foreign companies operating in this country are afraid to make noise because they are afraid of retaliation. Total is not the only one, there are other foreign importers that are faced with this situation".

Fuel shortage impacts Steel Giant

World steel giant, Arcelor Mittal has also expressed that the unavailability of fuel is forcing the company to close down its mining. In a statement, the company stated "Due to the current fuel shortage in Liberia, ArcelorMittal Liberia's operations will be mildly impacted over the next few days.

In order to limit the impact of this fuel shortage, the company has put in place short-term measures to ensure the company's 2014 operational targets are not affected".

The company stated that all it sites in Liberia including Monrovia, Buchanan, Yekepa and Green Hill Quarry, remain operational with some adjustments at the port, rail and mine.

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