Few companies are more vulnerable to economic and political change than those operating in the global energy sector. Deregulation, globalisation, and an increasingly competitive marketplace are affecting the playing field for energy businesses worldwide.
Typically in oil companies, there will be a few staff directly responsible for duty reporting and accounting. However, outside the immediate area of duty accounting, there are many people whose actions may inadvertently trigger duty liabilities. In fact, personnel situated in Manufacturing, Supply, Marketing, Distribution, Industrial, Commercial and Retail Departments, can all make decisions or take actions which impact on duty reporting.
Some key duty issues in the energy supply chain are:
- Maximisation of duty relief’s based on end use of oil and/or status of the customer;
- Maximisation of movements of oil under excise duty suspension – both within and between countries – to delay payment of duty to Customs until latest possible time;
- Re-branding and marking of oil changing the type of product and its duty status e.g., from high duty unmarked diesel fuel to low duty marked gas oil;
- Drawback and reclaims of duty (both excise duty and import duty);
- Import duty management and control are of particular relevance to oil trading activities (including spot market/chain sales trading); and
- Reporting, minimising, explaining and accounting for losses and discrepancies are key issues, since some losses are dutiable and others are not.
We can review the energy supply chain from the refinery to retail to highlight risk areas and areas of opportunity and to ensure compliance and accurate and timely duty reporting.