Liberia suspends all petroleum licenses in an effort to regulate the industry

Liberia’s President George Weah has suspended all petroleum importers licenses pending a tougher revision process and as a way to eliminate previous unorthodox strategies, according to a statement from his office.

The headquarters for Liberia’s Petroleum Refining Company (LPRC), a state-owned entity, in Monrovia, the capital.
The headquarters for Liberia’s Petroleum Refining Company (LPRC), a state-owned entity, in Monrovia, the capital. RFI/Darlington Porkpa

The review process will be carried out individually, considering a performance-based review covering the period January 2017 to January 2020, according to a statement from the President’s office.

“Re-activation of licenses will be done on a case-by-case basis, and those that do not meet performance and capacity requirements satisfactory to the Liberia Petroleum Refining Company will be subject to revocation,” said the statement.

The decision followed the unprecedented shortage of petroleum products that resulted in long queues at petrol stations across the country recently and is also intended to prevent a recurrence of petroleum shortages in the market.

Meanwhile, the President has dismissed Bobby Brown, Deputy Managing Director for Operations at Liberia’s Petroleum Refining Company (LPRC), a state-owned entity, which has the mandate to procure and supply quality petroleum and petroleum related products to the Liberian market.

“Bobby Brown is hereby dismissed for gross negligence and fraudulent activities. He will be investigated by the appropriate authorities and, if found guilty, will be prosecuted under the full weight of the law,” the release said.

Although there was no indication as to when the probe would begin, the statement outlined that during the investigation period, any other personnel found to be directly linked to illegality with regards to petroleum movements will face prompt administrative actions, as well as face prosecution under the law.

Importers have been given a 90-day grace period to pay for the petroleum that they have borrowed beyond their quotas, either in cash or in kind, a strategy called provisional lifting in industry parlance.

In the same vein, Petroleum importers who willfully transferred products stored at their facilities are also given 90 days to return the products, either in cash or in kind or risk prosecution.

“The Ministry of Justice is hereby ordered to place such importers in receivership until the products are recovered. Failure to replenish the products within the specified time will result in revocation of importers license and forfeiture of allocated storage facilities,” the office of the presidency said in the release.

Provisional lifting is a practice whereby the Petroleum regulator (LPRC) would allow one petroleum importer to take the product of another importer with the understanding that the borrower will replace the product by the time his own product arrives in port, according to Petro Trade Group, a major player in the petroleum industry.

The strategy was intended assist players within the petroleum sector, but sadly some importers exploited the system, says Petro Trade Group Head Abraham Kaydea.

“Some importers wouldn’t have vessel coming but will go and take another importer’s product using provisional lifting. There are importers who collected products for the last three years and are yet to pay. It’s affecting us and I think the President’s decision to that effect is laudable,” he told RFI via telephone.

Liberia Petroleum Refining Company and the Ministry of Commerce were also contacted by RFI, but were unavailable for comment.

According to the statement, the presidency was informed by findings and recommendations from the report submitted by the special presidential task force that made a formal inquiry into the recent shortage of petroleum products in the country.

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