KPDNK Enforcement Director, Mohd Roslan Mahayudin showing off Ops Titik
Utusan Malaysia have been on the prowl on the diesel smuggling activities since middle of May.
In that short time, they uncovered many horrid story of billions of money made from illegal trading of sub-sidised diesel with the enforcement agencies and authorities seemed to look away.
It is strange to read report of a certain agency chief claiming to have been monitoring these activities for 5 year. Maybe it is merely face saving remark. Any common folks in Rantau Panjang, Bukit Kayu Hitam or Batu Pahat knows these have been going on for decades and it is done in the open.
It is an open secret that PPP candidate for state assembly in the Pasir Putih parliament area of Kelantan, Dato Nik "Spray" Sapiea is a diesel smuggler. However, he is a small fry in a business, in which the illegal wholesale diesel market is at least 5-10 times bigger than the legal market.
In the midst of the large scale clampdown on illegal diesel activities, Ministry of Domestic Trade and Consumer Affairs (KPDNKK in short) launched an Ops Titik for the Peninsular northern region.
It is as though they are trying to distract the real clampdown coordinated by Special Taskforce by going after the small fishes and allow the big fishes to hide.
The clue was when Minister Dato Hasan Malek announced Ops Titik, he even mentioned the date. It puzzled the media that he retracted to ask them not report.
Throughout the crackdown, reporters have been saying the KPDNKK Enforcement Director, Roslan Mahayuddin have been both evasive and uncooperative.
Special Taskforce
It is as though he is uneasy and upset with the massive coverage on the crackdown coordinated by Special Taskforce.
The Special Taskforce is a high-level multi-agency special task force – comprising the Attorney-General office, Customs Department, Police, Malaysian Anti-Corruption Commission, Inland Revenue Board, Immigration Department, Bank Negara and others – set up since 2010 for the purpose of combating financial leakage and illegal activities.
Words are that Director for Enforcement, Roslan Mahayuddin have been pressuring the selected KPDNKK officials involved with the Special Taskforce on the various Ops like Odin, Odis, Odat, etc.
The Ministry's Ops Titik are only raiding small operators and not the big ones like the big ones up north in Penang, Bukit Kayu Hitam and Kedah. It is only for show and are only pursuing droplets of smuggled diesel.
If the ops for small fish is not enough a deviation to take the heat of KPDNKK and their friendly syndicates, they may have conspired with certain media to misquote the Minister on a new system on the sales of subsidised petrol and diesel and created a controversy.
The oftenly caught misquoted Hasan Malek had been an easy bait for media since he became associated with the Chap Ayam nicname for asking consumers to not buy chicken when price is rigged high.
The most recent one was on the Bank Rakyat loan to Deepak divulge by former Chairman Dato Sabaruddin Chik. On that issue, Hasan Malek did not do too badly. That is another story but Bank Negara Malaysia should charge Sabaruddin for breeching BAFIA secrecy rule.
The corruption in KPDNKK is enemic that one source in Batu Pahat told us that KPDNKK officials refuse to cooperate with law enforcement agencies. KPDNKK officials, from the top to the bottom, are on some taukeh's payroll.
When the enforcement side is the one on the take, these leakage became culturally imbedded in the Ministry. The only way forward would be to disband KPDNKK.
Illegal diesel market
Our so-called coast guard, APMM, which unfortunately falls under the Prime Minister's Department, maybe in cohort too with smugglers.
They have sufficient intelligence information of smuggling operations but the top bosses refuse to do anything. In fact, sources claim they have been collecting "toll" of RM600 for any ships passing through.
In the wholesale diesel market, oil companies supply to wholesalers which in turn supply to industries and foreign ships. These wholesalers are licensed to source from oil companies, storage, transport, bunkering, etc.
The legal requirement is for them to maintain their books and stay within the prescribed source, place and volume but KPDNKK looking elsewhere. No wholesalers are allowed operations near jetties but many openly operate near jetties and even own private jetties with pipes jutting out into the sea or river. .
By right, if government is serious, they should cripple the wholesalers syndicate. Stop the issuance of new wholesalers, review existing ones and do a thorough audit. However, KPDNKK would not want to do so and would drag their feet.
These wholesalers should source their diesel from oil companies or other wholesaler but they only source some 10-20% from oil companies and the rest from petrol stations and fishermen.
Most cases, wholesalers owned petrol stations too!
These fishermen gets subsidy for their fishes and make profit from diesel. It seemed no effort to scrutinised their consumption of diesel.
For instance they are given quota in which half are used to sell to smugglers. Even during monsoon season, which fishermen hardly goes to sea, these fishermen still maintain same level of diesel consumption.
If the petrol station sells subsidised diesel at RM2.00 per liter, they could sell it to wholesaler syndicates at RM2.10 per liter. These diesels are then sold to industries and ships at slightly lower than the RM2.70 per liter market price, say at RM2.40 - RM2.50 per liter.
Bigger operations would involve smuggling the subsidised diesel at international market of say US1 per liter. It involves international syndicates, primarily Singaporeans and the local wholesalers function to source.
These wholesalers had to resort to illegal avenues because the margin is profit margin thin. Wholesalers have to provide transport and credit to buyers. In some cases, wholesalers operate using oil trucks resembling Petronas oil trucks.
Raiding on illegal operations is a onerous and endless operations that will never end. Government need to also re-look into the cost and price structure.
One rumour heard is KPDNKK is readying themselves for an Ops Titik to Sabah. However, it is not for the reason that Sabah has a high consumption of diesel but because one linked to a Cabinet Minister's son is collecting commission from wholesalers to source subsidised diesel.
An Ops Titik in Sabah would be seen as though KPDNKK is serious, but the illegal commission taking be left alone.