Smuggling fuel products such as gasoline, Kerosene and diesel by organized crime networks and random gangs using soft borders in conflict zones, has increased significantly in the Arab region. Smuggling has become part of burgeoning parallel trade with regional and international mafia networks running a fuel black market. Such networks comprise gas station workers, distributors and drivers, who have extensive knowledge of the geography of targeted areas. 

Generally, members of the smuggling cycle include smugglers in origin countries, their partners in destination countries, distributors and finally small-scale vendors. Animals such as donkeys, mules and camels are used both to camouflage and transport smuggled fuel on routes through rough mountainous terrain. In some cases, smuggling takes place under the watch of corrupt border guard customs officers protecting smugglers, in return for agreed amounts of money. 

Small plastic or metal containers of various sizes are used in traditional fuel smuggling through the borders of Italy, Libya, Morocco, Algeria, Tunisia, Saudi, Jordan, Lebanon, Syria, Turkey, the West Bank and Israel. As there are different reasons for smuggling fuel, customized strategies should be developed to curb the influence of smuggler networks.

Indications

The following indications reveal the spread of this illegal trade/ transnational crime in the Arab region: 

1- Breaking up a Libyan fuel smuggler ring affiliated with the Italian Mafia. Recently, quantities of fuel were stolen from the National Oil Corporation’s installations, transported through a vessel in the Mediterranean to Malta and then to gas stations in Italy, France and Spain. The activity indicates that fuel smuggler networks expanded their operations from Arab countries to Europe. 

Most recently, on October 18, Sicilian police sought the arrest of nine people for running a Libyan fuel-smuggling network, in which tons of diesel were sold for USD 35 million to gas stations in Italy and other European countries. The smuggled diesel was offered to distributors for up to 60 percent less than market prices. Police managed to identify the network through tapping their phone calls.

2- Arrest of individuals suspected of smuggling fuel through Lebanon's border. On October 18, a Lebanese army patrol seized 40,000 liters of green diesel, 3 pumps and 8 storage tanks with a capacity of 50,000 liters, as well as pipes laid in the town of al-Bekayaa across the border with Syria. 

3- The Palestinian Security Services (PSS) in August and September seized quantities of adulterated diesel smuggled from Israel to the West Bank’s Area C, which is under Israeli security and administrative control. Smuggled fuel is distributed and sold to unlicensed gas stations and individuals. Luai Bani Odeh, head of public relations and information with the customs police, told Al-Monitor, that since the beginning of the year until August 31, an average of 82,000 liters of adulterated fuel have been seized, compared to 58,300 liters in 2016.

4- Increasing Demand on Smuggled Fuel in Tunisia in Summer. Between June and September 2017, large numbers of Algerian and Libyan tourists descended on Tunisia. Often, tourists use family cars with additional tanks of smuggled fuel to avoid using Tunisian gas stations.

On December 5, 2016, Hamadi Khemiri, the Secretary General of Trade Union Chamber of Fuel Distribution Companies, said that Tunisia’s fuel sector loses about USD 217 million a year, due to the increasing smuggling rate, where 30 percent of fuel sold locally comes from smuggling through the borders with Libya and Algeria. According to the official, the percentage was as low as 10 percent more than 20 years ago. 

Factors

There are various factors contribute to the growing problem of fuel smuggling in the Arab region. The most prominent of which are the following: 

Taking Advantage of Chaos

1- Growing Security Chaos. One example is Libya where the current security situation started to deteriorate after the fall of the regime of Muammar Gaddafi in 2011, leading to the spread of networks and militia involved in human trafficking, fuel and antiquities smuggling. The resulting chaos caused suspension of production at major oil fields and terminals. 

In early April 2017, Operation Mediterranean Storm was launched to curb smuggling of Libya’s subsidized fuel by sea. Smugglers used tankers to transport fuel to neighboring countries including Tunisia in the west and Niger, Chad and Sudan in the south. Other vessels transfer fuel to European coasts and Malta in particular. Although the operation targets entities and individuals, including distribution and transportation companies, gas stations supervisors and some officials of Brega Petroleum Marketing Company, smuggling activities continue. 

The situation prompted Milad al-Hajrasi, head of Fuel and Gas Crisis Committee, to say, that up to 15 million liters of fuel were smuggled daily by sea and 4 million liters a day across Libya’s land borders. To ensure that operations to combat subsidized fuel smuggling continued successfully, support from the ministry of defense, border guards, the air force and the navy is required. 

“Liquid Borders”

2- Violating Liquid Borders. In Tunisia, smuggling fuel from African neighbors - Algeria in the west and Libya in the east- by organized crime networks has become a phenomenon. Those who smuggle from Libya use light or heavy trucks and additional fuel tanks for family cars. 

Those smuggling from Algeria use donkeys in rough mountains, which led to an increase in the prices of the draught animals in Tunisia. Smuggler networks use trucks with large-size tanks. Moreover, gasoline smuggled from Algeria can be seen on the streets of Tunisian cities and towns. 

Flash-points

3- Some armed internal conflicts spilled over into the region. In one such case, the Lebanese army seized quantities of diesel smuggled from Syria. The activity, one of the consequences of the ongoing war in the neighboring country, has contributed towards creating interest groups along the Syria-Lebanon border that became interested in maintaining conflicts to sustain their economic gains.  

Unbalanced Development

4- Worsening Economic Crises. Tunisian border guard try to address the problem of unbalanced development and reduce social congestion among a large segment of the poor and unemployed youth. The economic situation led to protests in Tataouine Governorate demanding a share of natural resources and holding up the slogan “Where is Oil?”. 

The development forces the relevant Tunisian authorities to avoid a complete stifling of illegal cross-border trade. According to unofficial estimates, about 40 percent of Tunisia’s fuel is smuggled. The fairly high standard of living of residents of border areas is sustained by trade with Libya, conducted through both legal channels and smuggling. 

Profitable Trade

5- Appealing Income rates. Residents of border territories in the Arab region cannot give up high revenues generated from illegal cross-border trade and smuggling, especially in light of lack of development and investment projects that can mitigate poverty and unemployment. This is the case in southern Tunisia, considered poor when compared to the richer capital and major governorates such as Sfax, Sousse, Mahdia and Gabes. The situation has derived/ led some Tunisian families to define themselves as specialist in fuel trade. 

High Consumption 

6- Coupled with low domestic production, as is the case in Algeria where, according to July 14, 2013 statements made by then-interior minister Dahou Ould Kablia, indicated that 25 percent of the country’s gasoline production is smuggled. Moreover, a government report put the value fuel smuggled every year at more than USD 1 billion (equivalent to an average of 1 million tons). 

Difference in Pricing

7- Price fluctuation in recent years boosted fuel smuggling across the border between Jordan and Saudi Arabia, in some cases in public and through official border crossings. Sharp increases in fuel prices in Jordan led to a burgeoning cross-border fuel trade through the border with Saudi. Benefiting from cheaper prices in Saudi, Jordanians and Saudis in border areas use extra tanks in their cars to smuggle fuel to Jordan, where they sell it at prices many times higher than the original price. However, Saudi authorities took measures to curb the phenomenon. 

Parallel Tracks

It can possibly be concluded that because of its political, economic, social and security dimensions, the phenomenon of fuel smuggling in the Arab region cannot be completely eliminated. What is possible, however, is to minimize the issue through parallel measures. These include enhancing the capabilities of border guard forces, using police forces to counter smuggler mafias, replacing secret guides operating with border guard intelligence services. In addition, governments should reconsider their approaches to development of marginalized border areas as is the case in southern Tunisia, facilitate customs measures for trade (for instance with Libya, because it is the only source of income for a majority of the population in border areas), as well as commit part of revenue generated from border crossings, such as Libya’s Ras Jedir, to boost development in poor areas.