Petrol prices have gone up sharply by 10 Afs. Competitors are training their guns on the Ghazanfar Group for both the price rise and adulteration of oil although the Afghan National Standard Authority is standing firmly behind the group.
Petrol prices have gone up sharply by 10 Afs. Competitors are training their guns on the Ghazanfar Group for both the price rise and adulteration of oil although the Afghan National Standard Authority is standing firmly behind the group. An investigation by Nematullah Tanin.With winter approaching Afghans are concerned about the sudden hike in fuel prices from 55 to 65 Afs per litre (1 USD is roughly 56 Afs). The rise is being blamed on the greed of domestic oil importers particularly the Ghazanfar Group (GG).
Abdul Hameed who owns a petrol pump near Kabul’s 5th Police District admits oil companies have huge stocks and only care about selling it at a higher price, never mind the implications for people.
Sayed Anwar who drives a taxi in Kabul for a living says, “The capitalists and government are not thinking about the people. They just rob them under different pretexts.” He is afraid people will not be able to afford his taxi if fuel prices continue to rise.
Mahmood Qaderi, director of National Afghan Petroleum, accuses GG of adulterating imported oil, and selling it in the market at a “lower price”. He says, “GG imports refined oil under name of crude oil and sells it at a low price in the bazaar, as a result it escapes paying tax and creates unfair competition in the country.”
Fahim Hashemi, head of Aro Oil Company backs Qaderi. He adds, “GG does not have the ability to refine crude oil … (it) imports a type of oil called piramagone (naphtha), which has damaging side-effects for human health.”
Allegations mount
Environmentalists and some Members of Parliament (MP) have expressed alarm over the availability of piramagone, and requested the government to prohibit the sale of poor quality oil.
Mohammad Kazem Humayoon, an environmentalist, says piramagone contains substances that are fatal for humans and animals. The oil includes plastic, magnesium, lead and sulpher dioxide that can lead to cancer.
However, Mujibul Rahman Khatir, technical deputy head of a committee in Afghan National Standard Authority (ANSA), says piramagone is not risky.
Ismail Ghazanfar, the head of GG, dismisses allegations against his company. “Piramagone is half filtered oil. It has no side effects (on humans) or potential to damage the environment.”
He confirms GG has imported 4,894 tonnes of piramagone oil since July 29, 2013. While 1,342 tonnes were sold after it was checked by ANSA, the rest is in GG’s stock.
Ghazanfar says GG’s refinery in Hairatan Port is an investment of 32 million USD. Both the Ministry of Commerce and ANSA supervise its working.
Other oil traders insist GG has permission to import only 10,000 tonnes of crude oil but it has imported 500,000 tonnes in collusion with Ministry of Commerce officials.
But Ghazanfar says GG has permission from the Council of Ministers to import 500,000 tonnes, and that should someone want to see them the “documents are available” for scrutiny.
Aro’s Hashemi accuses GG of mixing crude oil with “a type of material without purification and selling in the bazaar by decreasing its price to 100 USD per tonne”.
Who is to blame?
Abdul Rahman Rahmani, head of the parliamentary Economic Commission, says complaints against GG have been made by 106 oil importing companies. “GG’s activities must be stopped as soon as possible because it is avoiding paying taxes and is perpetrating a fraud on the nation,” he says.
Officials in the Afghan Chamber of Commerce & Industry say only some countries in the region, for instance Russia, have the capability of refining a part of the crude oil. It is also impossible for GG to purify piramagone.
Azerakhsh Hafezi, in charge of international relations in the Chamber, thinks the claim is untrue because a company would need an investment of more than “one milliard” (1000 million) whereas “GG has invested only 32 million dollars.”
ANSA’s Khatir again came to the defence of GG. He says it has produced “2,000 tonnes of oil according to national and international standard through establishment of its refinery – there are no technical problems.” According to him, GG produces Grade 80 petrol.
Hafezi accuses GG of defrauding the government. “There is 180 USD custom tariff on every tonne of refined oil while the tax on crude oil 7 USD. But GG does not pay the tax, and should be prosecuted,” he asserts.
Najibullah Manalai, media adviser in the Ministry of Finance explains the government’s position. “The ministry does not tax unrefined oil,” he says. But if as oil traders claim GG is importing refined oil and paying custom tax for crude oil the “Ministry of Finance has the right to count it as a crime and refer it to the Attorney General’s office.”
GG’s Ghazanfar challenges the claim made by his rivals. He says they could not have access to documents because these are “sent over the internet to the Ministry of Finance, and not given to either traders or companies”.
