Two Managers From Two Fuel Companies Testify
By Yankuba Jallow
The General Manager of Jah Oil, Momodou Hydara and the Operations Manager of Atlas Company limited Dodou Njie, both testified in the ongoing economic crime case involving Saihou Drammeh and Lamin Gassama, former Managers at the Gam Petroleum Fuel Depot in Mandinari.
Both witnesses appeared on Tuesday 14th June 2022. Saihou Drammeh, erstwhile General Manager and Lamin Gassama, former Operations Manager at the said Depot, face eight criminal charges including economic crime and stealing. The two are accused of pilfering over $20 million and both pleaded not guilty. So far, the prosecution has called in nine witnesses to testify in the case.
Testifying under cross-examination, both witnesses agreed with the Defence Counsel lawyer Mene, that the price structure the Government introduced for October 2021 through a press release without consulting them, was one of the reasons for the oil shortage.
After the publication of the price structure, all oil marketing companies (OMCs) except one, signed up to a letter that they sent to the Government warning them of the consequences of the new price structure.
In the letter, the OMCs warned that the new price structure will have negative impacts on the supply chain of oil and gas.
Dodou Njie informed the Court that he has been working with Atlas for over 25 years and is the Operations Manager. While responding to Counsel Mene’s question, Njie confirmed that fuel shortage happens sometimes; that he keeps daily, weekly and monthly stock information of Atlas. He testified that in October 2021, he was part of the investigators who checked the tanks at Gam Petroleum (GP) and discovered that there was no physical stock. He informed the court that his book record showed that Atlas had stock at the depot but this stock could not be found.
Continuing his evidence, Njie said PMS, AGO and Jet Oil were almost at zero levels. However, attorney for the accused persons continuing cross-examination of the witness (Njie), put it to him that the stock information were in evidence that the stock level was not at zero.
Witness Njie in response told the court that the stock records before the court were right. Lawyer Mene further puts it to him that the stock level at the time was 90,507 litres for gasoil while PMS or Gasoline was at 1,388,733 litres. The witness reiterated his previous answer saying: “These figures are right. I agree with you.”
The witness said Atlas had a negative balance as of September 2021. He explained that the negative balance at the GP Depot was due to overshooting at the time of loading. Lawyer Mene however quizzed that there were times when Atlas had a negative balance for AGO and PMS that was not as a result of overshooting. The witness said he was not too sure about that.
Counsel Mene said in July 2019 when Muhammed Bazzi was in charge of fuel importation in the country, Atlas was on a negative balance for AGO 698,842 (Six Hundred and Ninety-Eight thousand, eight hundred and forty-two litres) while for PMS they had 446,615 (Four Hundred and Forty-Six thousand, six hundred and fifteen litres) but the witness said he is not aware of that.
A copy of an electronic mail (e-mail) addressed to Atlas was tendered by the defence and admitted as exhibit. The said document was sent via email by Muhammed Bazzi to one Fatou Njie, the Finance Director at Atlas and copied to the witness.
At this juncture, lawyer Mene put it to the witness that Atlas was on a negative balance of 119,980 litres of gasoil and 65,804 litres of AGO in December 2021. Mene said an e-mail was sent to Atlas to this regard and the witness was copied to.
Lawyer Mene sought to tender the email but Counsel for State Abdou Aziz Saho, indicated to the court that he is not objecting but will register his observation on the documents. He submitted that the documents have no nexus on the witness adding that the requirements for tendering of documents was not followed.
Notwithstanding, the document was admitted by the court.
Mene, referring from the correspondent emails, said Atlas was on positive balance for Jet Oil and LPG (Liquefied Petroleum Gas) but were on negative balance for gas oil and gasoline. The witness responded in the positive.
Lawyer Mene further put it to the witness that they were on a positive balance because they were able to replenish the products. Njie responded in the affirmative.
“Do you know of any OMC (Oil Marketing Company) operating in the Gambia that has never ran into negative balance?” Counsel Mene enquired.
“I don’t know,” Njie replied.
At this point, lawyer Mene made citations from the Interim Report of the Taskforce that investigated the oil shortage in the Country in late 2021. According to him, the said report by the taskforce blamed all stakeholders including PURA, GP and the OMCs but shy away from blaming the Government. PURA was blamed for not performing its oversight as required; adding if the regulator had performed their duties as required, the country would not have faced the oil shortage.
Barrister Mene further argued that The Board of Gam Petroleum was also faulted for not being in touch with the Management and Operations of the Companies. The report also reveals that the oil marketing companies that took products on negative balances responsible for the fuel shortage and ordered them to repay what they took. The report also faulted both the security and the customs personnel at the GP depot for alleged ill-responsibility. The Report recommended for a forensic audit at GP.
Reading through the report, the witness confirmed all the information put to him by the defence and added that Government’s failure to act on the protest letters by the OMCs also contributed to the problem.
“All sectors contributed [to the fuel shortage] including the Government,” he said.
“Everyone was blamed in the report except the Government. Is that fair?” Mene asked.
“I don’t think that was fair,” the witness answered.
“This problem of the shortage, do you think in your own opinion, is it fair to hold the 1st and 2nd accused persons responsible for the entire problem?” Lawyer Mene asked.
“I don’t want to get to that. It should have been a cocktail of all the contributing factors listed in Exhibit D6 [the Report by the taskforce] and the factors we raised in our letters,” the witness answered.
Momodou Hydara, former Deputy Director of the defunct National Intelligence Agency (NIA) and currently the General Manager of Jah Oil Company Limited, testified as the tenth prosecution witness (PW10). He said he is the General Manager of Jah Oil and he assumed this role in 2020.
Hydara said at the time of the fuel crisis in the country Jah Oil had 1,800,000 (One Million Eight hundred thousand litres stock) of diesel at the GP depot. Equally, he said Jah Oil had 60,000 (Sixty Thousand litres of petrol) in the negative balance.
“Your Company was lifting in the negative balance,” Lawyer Mene asked.
“Yes,” the witness answered.
The witness said the issue of lifting in the positive and negative balances is a normal practice that obtains in their industry; adding that it has been a norm since the inception of Gam Petroleum. He explained that GP had limited storage capacity to cater for what the oil marketing companies need. He said oil companies take products and replenish it when their products arrived. He said GP allows companies to uplift products and repay when their products arrive in order to keep the OMCs into business.
“There is no OMC that have never been in the negative balance. You have to borrow so that you keep your business running. When your products arrive, you have to replenish what you took,” he said.
Hydara said the issue of taking in the negative keeps the small OMCs in the business.
“The business would have been untenable if big oil marketing companies like Jah Oil is allowed to fill up the tanks at the Depot and smaller companies won’t have space and asked to wait until their products arrive. The absence of negative balance will give advantage of some companies over others,” Hydara said.
He said nowadays, the OMCs are dealing directly and borrowing from each other. He added that currently Jah Oil lend some OMCs over 500,000 litres which will be refunded once their products arrive.
The witness said Jah Oil could not access their 1,800,000 litres diesel at the time of the shortage but they were subsequently refunded when the situation became stable at the depot. He explained that during the crisis, Jah Oil used to source their products through Senegal to salvage the fuel shortage in the country.
The business mogul Manager testified under cross-examination that the practice of lifting product on a negative balance is “pretty normal” and once your products arrived the company will be deducted from what they took and the rest becomes theirs.
“As OMCs, we are regular importers and once the Cargo comes, they subtract it,” he said.
On the Government’s price structure, Hydara said it was not favourable to the OMCs because they cannot operate their business at a loss. He told the court that OMCs were displeased with the price structure, noting that it came when the Government decided to tamper with certain parameters in the price structure. He said the two protest letters the OMCs wrote to the Government warned it of the destructive consequences of the price structure on the supply chain.
“Many of the OMCs were reluctant to import because you will start operating at a lost. We were actually nervous because they touched on the premium. We do not want to bring products and run at a loss,” Hydara said.
He testified that the OMCs knew that if the Government did not act on their letters it will affect the industry. He alleged that Government failed to consider the exchange rate which is variable but the Government fixed prices which according to the witness “you cannot find anywhere.
“We knew if they [Government] did not change course, then we will be heading to halt. This was what triggered the [protest] letters,” the witness asserted.
Jah Oil and Atlas are both Oil Marketing Companies (OMCs) operating in the Gambia. These OMCs import and distribute petroleum products in the Gambia. They source their products from international traders like Trafigura, PSTV, Addax and others. However, the petroleum products are stored by Gam Petroleum in Mandinari.
It could be recalled that sometime in October 2021, the Gambia was hit by a fuel shortage for some weeks because products were not available at the GP depot. This forced OMCs to source their fuel through Senegal because GP had no products to release to them.
Hearings continues on Wednesday, 15th June 2022 at 2:30 pm.