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Sierra Leone Business: PRA to institute penalties against defaulting mobile operators

Oil storage tanks

The Petroleum Regulatory Agency (PRA) is now discussing with the National Revenue Authority (NRA) to institute stringent penalties against defaulting telecommunication/mobile phone operators in the country. According to the PRA these operators have failed to meet their obligations by paying for their licenses for storing fuel/petroleum across the country. A combine total of nearly 500 sites and tanks are yet to be licensed by these telecommunication companies despite the agency’s effort. The Agency is warning these companies to cooperate fully with PRA in relation to payment for their private petroleum bulk storage facilities/base sites across Sierra Leone. Additionally, the Agency require support from law enforcement agencies for compliance and punishing of law breakers via an effective court system. Some of the Agency’s constraints highlighted are the risks of going to high risk areas in an effort to ensure industry compliance by petroleum operators and auxiliary cooperation with Oil Marketing Companies (OMC) required in enhancing industry compliance in the sector. Sales volume for 2019 are projected at 2.5 percent increase based on January to July 2018 actual sales volumes and August to December 2018 projected sales volume. The current PRA Fund rate of Le17.25 per litre is projected to remain the same in 2019. Sales volume to Sierra Rutile have been excluded from the projections as the company continues to claim that they are only entitled to pay import duty (12% of C&F) to Government and nothing to the PRA Fund. As part of their operational activities for the first half of 2018, the Agency superintended 17 vessels of which 14 were for white products (petrol, diesel, jet A1, kerosene and fuel oil) and 3 vessels with Liquefied Petroleum Gas (LPG). Petrol (43,436.749 metric tons), diesel (51,454.115 metric tons), jet A1/kerosene (1,607.791 metric tons) and LPG (1,291.809 metric tons). The PRA also superintended the export of 5,642.269 metric tons of petrol to Liberia. Projections on revenues the PRA says are based on projected sales volumes by the OMCs which have the tendency to fluctuate based on the marketing strategies of the OMCs and the activities of the mining companies which are outside the PRA’s control. The timing difference which is the period between the time they invoice the OMCs and the time they pay is said to also be a factor that affects their revenue recognition and hence the receipt of revenues. Their annual estimated revenue projections for 2019 to be collected by the PRA is streamed as follows, PRA Fund is Le6.421 billion (Le6,421,713,300.22) and registration and licenses fees is Le2.706 billion (Le2,706,500,000.00).

By Zainab Iyamide Joaque

Monday October 01, 2018.

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