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MoFEA Blames Fuel Shortage On Oil Marketing Companies

Alagie Jallow, Director of Tax & Revenue Ministry of Finance.

By Buba Gagigo

The Director of Tax and Revenue of the Ministry of Finance and Economic Affairs (MoFEA) has blamed the Oil Marketing Companies (OMCs) for the lack of fuel in the Gambia since on Friday.

“The shortage that is experienced from yesterday to today, we have come to the realization that it is not actually fuel shortage; but it was a refusal to uplift fuel from the depot and sell to consumers,” Alagie Jallow said on Kerr Fatou’s Saturday show, the Brunch.

He believes that the OMCs do not lose more margin to the government contrary to the allegation.

“Claiming that they are losing their margin and profit to government. I believe that is not the case. Government over the past seven months, have lost 1.2 billion ton energy subsidy. And that is equivalent to the best performing months of GRA revenue collection. Because government was compelled to subsidize to mitigate fast past through impact of fuel prices to the ordinary Gambians, we had to forgo this, equally the OMCs had to forgo some parts of their revenue.

“The amount of fuel that is coming to The Gambia is so minimal that in terms of economic scales, we don’t have large boats or shipment that are coming which causes cost effective in-terms of shipment or shipping cost for the Gambia. So as a result, that will have a cost implications and we have to deal with that cost implication, deal with the Russian-Ukraine war and deal with the social dimension,” he explained.

Jallow said when they made an assessment in the subregion, they realized that the trade in premium in the Gambia was so much generous; adding that they also found out that the price structure was also skewed towards traders. 

“So as a result, there was a government engagement to see how best to also mitigate the fuse part through effect of the Russia Ukraine war, you know the exchange rate difficulties in the pricing. So this was what led to a marginal reduction of the traders premium from $100 per metric ton to $80 per metric ton,” he continued.

On the dealers margin he said: “The third one is there is dealers margin, for the time that I have been at the Ministry of Finance, this dealers margin used to be between D2 to D3. Recently this dealers margin has been increased up to D5.88 per litre. That means for every liter that you sell, an OMC is getting D5.88. In context, if you are selling, let’s say 2 million litres as an OMC, let’s take GNPC as an example. If they sell two million litres, they are getting close to 12 million Dalasi margin. By our estimation, that is a fair level of margin operating through the subregional benchmark.”

On Friday transport services was disrupted by fuel shortage attributed to the “refusal” of Oil Marketing Companies to sell fuel to motorists. However, the OMCs have declined to comment on the issue.

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