Capitol Hill, Monrovia – The House of Representatives’ Specialized Committee investigating shortage of gasoline on the Liberian market, has called for ‘administrative actions’ against the management of the Liberia Petroleum Refining Company (LPRC) for distortion of information during their legislative inquest.
The 20-person Committee, headed by Rep. Zoe Emmanuel Pennue (District #1, Grand Gedeh County), in its final report to Plenary on Tuesday, February 25, said LPRC’s management did not make full and truthful disclosure to the special committee.
In its finding, the Committee said products that should have been ordered by importers in October 2019 that could have prevented the shortage were not made due to financial capacity issues, hugely caused by the practice of ‘provisional lifting’.
The practice of provisional lifting allows importers to take products from each other to be paid later.
The committee reported that in a meeting with the LPRC Managing Director, Ms. Marie Urey Coleman, she failed to state reason why petroleum products were not being imported at that time. According to them her answer was, “I don’t know.”
They indicated that she told them that a Special Presidential Taskforce is being set up to resolve the problem.
However, the Committee noted that accounts from the other two major stakeholders, including the Petroleum importers and the management of the National Port Authority (NPA) state the contrary.
“The major problem is provisional lifting which is allowed before LPRC can verify the amount of product that is offloaded. Unfortunately, payment for products lifted under the provisional lifting arrangement are not being made, thereby creating indebtedness of US$9 million-US$12 million.”
– House Special Committee Report
Petroleum Importers
In a meeting with the committee, the importers added that the provisional lifting arrangements were made with the LPRC and not the importers concerned, and this practice has led to huge debt between US$9 million and US$12 million by some of the importers, and impeding importation. The LPRC refuted the claims.
Excerpt of the report: “The major problem is provisional lifting which is allowed before LPRC can verify the amount of product that is offloaded. Unfortunately, payment for products lifted under the provisional lifting arrangement are not being made, thereby creating indebtedness of US$9 million-US$12 million.”
The importers also said LPRC does not have or has discontinued inventory control mechanisms that could safeguard products in storage tanks.
And some of these mechanisms that are either lacking or abandoned include the Automatic Tank Gauging (ATG), which automatically determines the amount of product in the tank, transparency report that is provided to all importers indicating quantity of products for each importer at a given time, regular physical verification of stock and minimum reorder quantity.
The importers indicated that loss of products could be due to spillage and evaporation, although spillage and evaporation would not cause significant shortage as was being experienced.
The importers also emphasized that the NPA is not the problem, pointing out that LPRC did not give them (importers) notice about the use of smaller vessels.
Meeting With NPA
From the onset of the crisis, it was reported that the shortage was also due to dredging of the port in 2019.
However, the Committee reported that the NPA Managing Director Bill Twehway refuted such claim, adding that all port users were informed prior to the exercise to avoid inconvenience.
Mr. Twehway said, from the onset of the petroleum product, the port had already been dredged, and now it can accommodate two large vessels.
He was quoted by the Committee as blaming the shortage of gasoline to the lack of security for petroleum products at the LPRC, which is causing importers to stop bringing in products.
Findings & Recommendations
The Committee, in its findings pointed out that the LPRC does not have or has abandoned infantry control and safeguard mechanisms including automatic tank gauging, transparency report, minimum reorder stock requirements, leading to discrepancy between what is documented on paper and actually in the tanks.
It furthered that provisional lifting as alarmed by LPRC has created huge indebtedness of importers to one another to the extent that some importers are experiencing financial constraints, and the dredging of the port was not an issue as port users were adequately informed to bring in smaller vessels.
In its eight-count recommendations, the committee called for “the practice of provision lifting as allowed by LPRC be discontinued immediately; that importers who benefitted from provisional lifting and still indebted to other importers be made to settle their indebtedness; and that the LPRC digitizes its inventory monitoring and control process to include installation of Automatic Tank Gauging to safeguard products.”
The remaining recommendations include: “routine physical inventory verification process be carried out by LPRC; that minimum reorder point of three months stock be introduced; transparency report be reintroduced; that the administrative action be taken against the LPRC management for distortion of information and that the Legislative oversight continues with the LPRC until the recommendations are implemented.”
Meanwhile, Plenary, in a motion filed by Rep. Alex Grant of Grand Gedeh County, voted to extend the discussion of the report today, Thursday, February 27.