Overseas Fuel Smuggling Exposed

Petrol earmarked for domestic consumption diverted for sale abroad in well-organised smuggling operation.

At a checkpoint south of Baghdad, fuel smuggler Salim greeted the Iraqi police as if they were old friends. He showed them his fake government documents, which said he was an employee of the oil ministry, and after a brief, friendly exchange, he was on his way.

“For each petrol tanker, we pay 25,000 Iraq dinars (around 17 US dollars) at every checkpoint so they don’t make trouble for us and are totally cooperative,” Salim, who declined to give his full name, told this IWPR reporter who accompanied him on a recent smuggling trip from Baghdad to Basra.

Smuggling fuel is one of the biggest problems facing Iraq’s oil industry.

The government keeps petrol prices low but there is not enough of it to satisfy demand. So while fuel costs around five cents a gallon at a legitimate gas station, it is sold for ten times as much on the black market.

But the smuggling of petrol abroad is the by far the most profitable racket.

Salim, 35, who says he has been smuggling for two years, spoke of a wide, sophisticated criminal network - including oil ministry and other government and security officials and fuel station owners - that controls the illegal sale of petrol abroad.

Salim, who graduated from the Oil Institute in Baghdad in 1997, says crooked oil ministry officials provide him - and others - with documents entitling him to deliver petrol to filling stations in the south off the country. Instead of transporting the fuel to the latter, who are in on the racket, Salim takes it directly to Abu Aflus port in Basra where it is smuggled overseas and sold at great profit – the proceeds used to pay off everyone in the smuggling chain.

Salim drives a tanker containing 50,000 litres of fuel from Baghdad to Basra four to five times a month and earns 600 US dollars for each trip.

On a trip to Basra on April 8, Salim left his Baghdad home at 4 am for the nearly six-hour trip to southern Iraq. After about an hour on the road, two other petroleum tankers joined him, and the drivers gave Salim a signal.

“They are my colleagues,” Salim explained. “Today we will deliver three tankers, each one carrying 50,000 litres. They are just drivers like me but one of them always escorts us and it seems that they (the smuggling ringleaders) rely on him to monitor us.”

Despite the risks, Salim appeared confident and jovial throughout the journey. He assured this reporter that he never has any problems getting passed Iraqi and US checkpoints.

At one checkpoint manned by American military forces, Salim gave his fake documents to the translator working for the soldiers and managed to smooth talk his way through.

At this checkpoint, he also chatted to a fellow tanker driver. When Salim returned to his truck, he told IWPR, “He was wondering about you…who you are. I told him that you are my cousin and you have some work to do in Basra and that you don’t know anything about our smuggling.”

There are dozens of tankers that drive to Basra on a daily basis as part of the criminal operation, the details of which – such as the final destination of the fuel and the sale price – are kept secret from the drivers. “We have no right to ask about this,” said Salim, whose family is not aware of his involvement in the scam.

When Salim and the other tanker drivers reached Abu Aflus port, there was a man there to welcome them. He was taken aback when he spotted this reporter. Sensing this, Salim quickly introduced IWPR as his cousin.

The man then ordered the smugglers to unload the fuel onto an awaiting ship - which had no identity markings - through a hidden pipeline.

A group of Abu Aflus port police officers were drinking tea in a restaurant as Salim and the other smugglers unloaded the fuel. One of the officers, a first lieutenant who spoke on condition of anonymity, said it was very difficult to stop smugglers.

“These gangs are powerful and they have guns and money so it’s difficult to confront them,” he said. “We can’t do anything and it’s very easy for them to kill us if we try to stop their activities.”

Oil ministry spokesman Assim Jihad acknowledged that some defence and police officials had blamed his ministry for the petrol smuggling, but he insisted that the security forces could do more to tackle the problem.

"We are fighting smuggling in every way but still, it's [also] the duty of the security forces to prevent it," said Jihad.

For its part, the oil ministry has ordered a crackdown on corruption among its staff and is to keep a closer eye on the distribution of petrol around the country.

Youssef al-Shekhlee, a technical expert in the state-run South Oil Company, says there’s an urgent need to tackle the problem.

“If the necessary procedures aren’t taken to stop smuggling, then Iraq will lose its most important financial resource,” he said.

After the tankers were unloaded at the port, Salim was on his way back to Baghdad.

Though he earns at least 2,400 dollars are month from smuggling, Salim revealed on the trip home that this delivery might be his last. He said he was tired of traveling and that the long hours on the road was beginning to cause him health problems.

The IWPR reporter asked him whether his bosses might threaten him if he tried to quit, as he and his like know so much about the smuggling operation.

“It’s not like what you imagine,” he said, chuckling.

“Our job is like working for the government. We can quit at any time since we don’t know more than what they want us to know.”

Ziyad Khalaf al-Ajely is an IWPR trainee.

Locations Iraqi Kurdistan, Iraq