An investigative report by TOLOnews has found that Afghanistan has no existing law to control the importation and distribution of fuel in the country – which comes amid an increase in calls to privatize the sector.
The government-owned Fuel Corporation of Afghanistan confirmed the finding and said parts of the existing statute of their organization is against the constitution.
The fuel and gas sector is estimated to be worth about $4 billion USD a year but half of this is believed to be money made and spent through illegal channels.
Walid Tamim, head of the Fuel Corporation, said one part of the sector spends and generates more than $2 billion USD a year and that “they conduct their deals through money exchangers and buy fuel from [local] markets.”
He said when appointed to the position his mandate was to change the corporation to a fuel importing company.
“Over the past two decades, the corporation’s activity and its statute was reviewed only once during the Taliban regime and a few articles were added to it,” Tamim said.
“The corporation should be dissolved. No doubt, both government and the private sector want this. But now it is a good step if they want to change the corporation. If they want to change it, then they should change it in a better way,” said Azraksh Hafizi, head of Fuel Importers Union.
However, a number of investors said the plan to change the corporation to a fuel importing company will be a move to monopolize the industry.
“This will affect and damage the free market and will suppress private companies,” said Zabihullah Naseeri, an investor.
Meanwhile, the TOLOnews report indicates that the issue of privatizing the corporation has been an ongoing problem for 10 years; but was recently dealt with at a high level.
The Fuel Corporation director said the two organizations – the corporation and the Commerce Ministry – should further discuss the issue in order to recognize and overcome the issues.
“The duty of Fuel and Gas Department has not progressed; all has been mere-lip service. Let’s send a delegation there and investigate. I have documents on hand which are accurate and reveal that the work of the Fuel Corporation is dwindling,” said Shekiba Hashemi, a member of the Economic Commission of the Wolesi Jirga (Lower House of Parliament).
The TOLOnews investigation found that of the 1,000 registered fuel and oil trading companies in the country, more than 100 are operational.
“There is no experience in the world which shows government-owned corporations provide better services than the private sector. Experience shows that the private sector can act better and provide better service – given that it is organized and managed properly,” said Sayed Ikram Afzali, head of Integrity Watch Afghanistan.