State capture, a term that refers to the manipulation of state institutions by powerful individuals for personal gain, has surfaced as a pressing issue in Liberia’s governance with a state owned oil company leveraging a 20th century dictator’s law.
The Liberia Petroleum Refining Company (LPRC), a state-owned enterprise, now finds itself at the center of a contentious debate regarding its newly expanded role within the country’s petroleum market and the implications of this shift on public interests and private sector integrity.
State capture often occurs when officials leverage their political influence to gain control over state resources, manipulating laws and regulations to favor their financial interests rather than those of the public.
In Liberia, this concern has escalated as the Unity Party Alliance has appointed individuals in pivotal positions across various lucrative state-owned enterprises. Among them is LPRC, which has recently transitioned from its traditional role of regulatory oversight to become a competitor in the petroleum importation market.
This shift is underscored by LPRC’s July importation of 10 metric tons of Premium Motor Spirit (PMS), commonly known as gasoline. The agency positioned this shipment as a step toward enhancing national energy security and self-sufficiency.
However, critics argue that this move could undermine the regulatory structure it is meant to uphold. Traditionally, the LPRC served as a central hub for fuel storage and distribution without directly competing with private companies involved in importation.
In its new capacity, LPRC not only imports and sells petroleum products. Oracle News Daily understands it has plans to engage in retail and wholesale operations, opening gas stations across the nation.
This ambitious expansion raises questions about the transparency of LPRC’s operations and the implications of such a dual role. Currently, there is a significant lack of public information regarding LPRC’s investment strategies and the potential benefits to the state from its petroleum trade.
On its official website, LPRC cites a legislative act from 1989 that grants it exclusive rights for the importation and sale of petroleum products.
However, the company seems non-compliant with its own importation policies. These policies outline required annual importation fees based on ownership structures, yet there is scant evidence to confirm LPRC’s adherence to these stipulations.
Additionally, the company’s financial performance requirements, including the need for audited financial statements and adherence to import quotas, appear to have been compromised, with LPRC violating its importation policies by lifting shipments above permitted thresholds.
The discrepancy in pricing following LPRC’s entry into the market has not gone unnoticed. Senate President Pro Tempore Nyonblee Karnga Lawrence expressed concern over perceived profiteering, citing excessive wholesale and retail margins that could result in higher prices for consumers.
The latter has drawn criticism from local citizens, many of whom are already struggling with rising living costs, leading to calls for a reassessment of pricing structures.
Industry insiders have voiced grave concerns over LPRC’s newfound role, labeling it a potential threat to private sector investment.
A prominent petroleum products importer, who requested anonymity, claimed that LPRC’s entry into the importation business undermines the established agreements with licensed private importers.
This could lead to job losses for hundreds of Liberians employed in the private sector as increased competition from a state entity may force smaller businesses to shutter.
“Such maneuvers, if not urgently addressed, will displace local workers and jeopardize livelihoods across the country,” the importer warned.
Adding to the uncertainty are unsettling reports suggesting LPRC may be engaging with foreign entities under international sanctions or associated with financial irregularities. If substantiated, these dealings could have far-reaching consequences for Liberia’s international standing and financial viability, including potential diplomatic fallout and damage to the country’s creditworthiness.
