The Auditor General’s report states that the program revenue budget in the financial year ending June 2018 was 3.330 Billion Shillings but only 3.154 Billion Shillings was collected, as a result, the activity on national monitoring coverage of fuel quality was not fully undertaken.
Members of the Public Accounts Committee of Parliament have
questioned the procurement of a contractor to provide fuel marking services in
Fuel marking services are required to ensure that the quality of petroleum
products entering the country is compliant with industry standards.
The MPs on the committee chaired by the Budadiri West MP Nandala Mafabi were Thursday
meeting officials from the Ministry of Energy and Mineral Development.
The officials led by the accounting officer Under-Secretary Emmanuel Freddie
Mugunga had appeared to respond to queries in the auditor general’s report on
the Fuel Marking and Quality Monitoring Program for 2 consecutive financial
years ending June 2019.
The Auditor General’s report states that the program revenue budget in the
financial year ending June 2018 was 3.330 Billion Shillings but only 3.154
Billion Shillings was collected, as a result, the activity on national
monitoring coverage of fuel quality was not fully undertaken.
The ministry attributed the revenue shortfall to a delay in procuring a New
Technology provider due to an administrative review of the procurement process.
Following the administrative review, the Energy ministry in May 2018 agreed
with SICPA Global Fluids Integrity SA (GIF) to provide fuel marking services.
The contract that runs until 2023 obliges GIF to charge 26 Shillings per litre
of fuel marked exclusive of taxes. It remits 15% of collections to the
However, the auditor general’s report for the financial year ending June 2019
states that there were inadequate verification and reconciliation of revenues
remitted by GIF hence a risk of understatement of the revenue declared to the
program by GIF.
MPs noted that the contracting of a service provider has resulted in an
un-quantifiable loss to the government since there is no clear mechanism to
detail how much revenue is collected periodically by the provider.
Michael Tusiime the Mbarara Municipality MP noted that he had compared URA
domestic taxes records with the Energy ministry financials and recorded a
disparity in the revenue collected by GIF and the fuel imports.
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The Commissioner of the petroleum supply department Rev. Frank
Tukwasiibwe blamed this on lack of access to the URA Asycuda World Data System
that would reliably indicate how much fuel has been cleared by the tax body to
enter the country hence provide an accurate estimation of revenues from the
fuel marking service.
But Mafabi accused the ministry of abdicating its responsibility and stated
that the fuel marking service can be executed by the ministry as a Non-Tax
Revenue source. He asked Mugunga to write to the ministry of finance for
permission to take over the exercise as an Appropriation in Aid activity.
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MPs also demanded that the ministry gets immediate access rights to the URA Asycuda
World Data System. Tusiime highlighted the advantage of synchronized data.
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Mugunga promised to put into consideration all the issues raised by the MPs.