Monday, February 24, 2014

NANO-TAGGING WAS NEVER A TOTAL FAILURE TO CURB DIESEL SMUGGLING



The government’s subsidy bill for year 2013 is estimated of RM23 billion and almost half of this is spent on diesel subsidy. Out of half, government introduced Diesel and Petrol Subsidy Scheme to help cover fishing operation costs and the scheme is operated by the Fisheries Development Authority. Its the government commitment to improve our fishermen living standard and their socio-economic status.

Yes, in theory there shouldn’t be a shortage of diesel for land-based transport and our fishermen but in real-life, a portion of the subsidised land transport diesel is being smuggled to factories and high demand from other nations.

However, this economic cushion has been opportune for abuse by masterminds who smuggle these subsidised goods to foreign destinations with the primary objective of raking large profits.

The best solution to all cases of smuggling is simply to let the open market set the price, i.e use the open market price so that there is no smuggling to Thailand, nor to domestic factories simply because there is no price difference.

However, during recent times, it was found by AG Task Force that a serious leakage in the supply of subsidised diesel had caused the Government to bear huge losses annually. This phenomenon indirectly resulted in the failure of Government’s efforts and goals for a particular group.

The next best solution is to give powerful tools to the enforcement team lead by AG Taskforce. When they had nano-tagging of subsidised diesel, factories were caught every day because the smuggled diesel was easily identifiable. Smuggling dropped off and there were no shortages.

This is really possible! Domestic Trade and Consumer Affairs Ministry has been using nanotechnology in order to confiscate illegally used subsidised diesel. The ministry is using the NanoTag programme under which the subsidised diesel is tagged with nanoparticles at distribution depots of all fuel companies before the distribution process begins. Nanotechnology is being used by the ministry for detection of subsidised diesel and this had helped them in bringing down the fuel misuse cases by half and hence reduce smuggling of the fuel. With the aid of the nanotechnology, the team has been able to catch 342,400 liters of subsidised fuel. Nanotechnology has surely proved efficient in bring down illegal activities which otherwise would have been hard to detect.

In year 2009, AG Task Force together with MACC and MDTCC had succeeded in an operation codenamed ‘Ops Nano’. They arrested 36 individuals and seized 458,000 litres of diesel worth more than half a million Ringgit. These offenders are locals and working as sales operators in diesel industry, jetty operators, middlemen and tanker drivers.

As reported in MACC's annual reports and information and complaints received by AG Task Force, it was found that some individuals were involved in the Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC) to refrain from actions being taken against them. Meanwhile, the Regional Fishermen’s Association (PNK) is said to be the mastermind behind the malpractices involving subsidised diesel worth millions of Ringgit. It was also reported that jetty operators, boat owners, illegal fuel tank owners and individuals.

The leakage of diesel was first traced back from the Government Depot that sells fuel supply to PNK, factory, border area and storage tank. Starting from a PNK agent, the supply will be sold to a storage tank operator and to the fisherman who in return will vend to a tanker dealer, foreign based fisherman, factory or at times transported to the border.

Interesting enough, this nano-tagging of subsidised diesel was stopped on the grounds of cost. The result is a sharp increase in fuel smuggling and the month-end shortage of subsidised diesel for land transport operators. Our enforcement officers are seen to be toothless tiger when such effective mechanism to curb subsidised diesel leveraged by these culprits is put to a stop.

Obviously then, the cessation of nano-tagging of subsidised fuel has to be reconsidered.

It is told that reconsidering to this mechanism had been long overdue dragged in discussions for several years. Was the delay on purpose to ensure certain quarters continously reap profit?

Who should we help? The smugglers and culprits or the nation?

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