Fuel smuggling is affecting many countries and is giving governments in many parts of the world headaches, as this illegal trade is depriving them of billions of dollars in revenue annually. And in a period of high fuel prices, a fertile ground is being created for the cheap, smuggled fuel.
According to international media reports,two global tycoons — KOLMAR and Glencore — are reportedly involved in China’s largest oil smuggling in a decade with their Beijing branches staff being investigated.
Dou Shengyuan, business manager in China’s branch of KOLMAR, as well as Li Buhua, chief of Beijing representative of Glencore’s Singapore energy arm, were taken away by a special investigation team from the customs after China’s traditional new year holiday, 21st Century Business Herald reported.
After posting bail, Dou on Tuesday had been back home in Zhuhai, a city on the southern coast of Guangdong province, it said.
Billions of yuan were involved in the case, one of the largest crack downs by the customs in recent years, an unnamed person with knowledge of the matter was quoted by the newspaper as saying.
About 800,000 tonnes of refined oil products were smuggled during the August~ December period in 2010, and nearly 1 billion yuan of fuel consumption tax is evaded, among much more illegal benefits, the source said.
Nearer home,  The Global Post reported that Venezuela has the world’s cheapest gasoline, which its government is believed to be subsidising to the tune of $8 billion a year. A gallon of 95-octane gas sells for 18 cents per gallon, while 91-octane costs just 12 cents per gallon. In contrast, in Colombia, where the price is set by the free market and which has less oil, gasoline sells for around $4.15 per gallon. Throw into the mix a black market exchange rate (another thriving business in this border area) that reduces prices by a further two-thirds, and it’s easy to see how contraband gas has become such a lucrative business here.
The border region’s economy is becoming increasingly dependent on the illicit trade. “This used to be a coffee-growing region, but now lots of producers make a living from smuggling gasoline,” said German Duarte, president of Transport Workers Union in Tachira, Venezuela. “It’s difficult to find people to work on the coffee farms.”
A 2007 study by the Ministry of Transport estimated that as many as 70 percent of cars crossing the border between San Antonio and Cucuta are smuggling gas. The thousands of gallons smuggled across each day provide no monetary benefit to the Venezuelan state, said Rafael Ramirez, president of Petroleos de Venezuela, Venezuela’s state-owned oil company.
Our country has been having its battle with fuel smuggling and most of the smuggled fuel comes from neighbouring Venezuela with which we share a large, porous border which makes it difficult to monitor and protect. Nevertheless, the Guyana Energy Agency (GEA) has been waging a sustained battle against fuel smuggling which has been fairly successful in curbing the illicit trade but not eradicating it.
Recently, the GEA has been able to nab and successfully prosecute several fuel smugglers and this will certainly boost the fight against the illegal trade.
At the recent parliamentary debate held on August 4, 2011, when the Guyana Energy Agency (Amendment) Bill 2011 was passed, it was revealed that fuel smuggling in Guyana has reduced over the past years.  Analysis of data revealed that there has been more testing in the fields and a decrease in the number of sites being found with illegal fuel.
In 2004, 573 sites were visited with 13% having significant dilution, whereas in 2010, some 1,313 sites were visited and only 3% were found with significant dilution.  The amendments were passed to, among other things, make it an offence for persons to be in unauthorised possession of duty-free fuel that has been marked.
The above reports  are an encouraging sign and the battle by the GEA must be sustained to eliminate this illegal trade which is unfair to the licensed fuel dealers and is depriving our treasury of much needed revenue.