Q&A: Gasoline gumshoe is hot on the trail of filched fuel – Houston Chronicle

By James Osborne

Every year, vast quantities of fuel go missing worldwide, but it is a crime that remains widely unknown. Enter Ian Ralby, a maritime lawyer at the Atlantic Council and adjunct professor at the U.S. Department of Defense’s Africa Center for Strategic Studies, who has spent years traveling the globe looking into how criminals get their hands on illicit gasoline and diesel and then sell it on the black market.

He recently sat down with the Chronicle to discuss the issue.

Q: Let’s start with the basics. If one wants to steal fuel, how easy is it?

A: It depends where you are. In countries where refined fuel is moved through pipelines, we see pipeline tapping. And in countries where you have a discrepancy in price from one state to another, you see cross-border smuggling, either by truck or in some cases by tanker. Because fuel is vital to all our lives, whether were in rich countries or poor counties, developed countries or undeveloped countries, we all need it, and we all look for ways to get it cheaper than the market price.

Q: We hear all the time about oil theft in places like Nigeria and Mexico, but not as much about fuel theft. Why did you decide to study this?

A: Because it’s so easy to move and sell refined fuel products, they’re more frequently the target of illicit activity globally, though not in places like Nigeria where crude theft remains a big problem. But when you look at it worldwide, partly because of the drop in price of crude, criminals have focused much more on refined products the last few years.

Q: How commonplace is this sort of activity in wealthy countries like the United States and Europe?

A: There’s a lot more illicit fuel in the U.S. and EU than we would imagine. In the case study we did in Mexico, cross-border activity indicated that American buyers were seeking to purchase fuel illicitly or under dubious circumstances. Some U.S. court cases have even borne that out, and in our own work we found plenty of examples of tanker trucks disappearing.

Q: But considering most of us buy our gasoline at gasoline stations, how easy is it to offload one’s stolen fuel?

A: It depends. If the norm is buying gas from gasoline stations, you have to sell it into the legitimate market. Take Greece as an example. Twenty percent of the fuel sold there has been adulterated, either adding kerosene or some other additive to stretch the fuel. On the other hand, there are countries where fuel stations are not the norm. I was recently in Cambodia and we were driving along, and I mentioned to some colleagues, ‘I can’t believe how many illegal gas stations we’re passing.’ There were all these little stands with people selling Coke bottles full of fuel, and they’re like, ‘That’s just how it’s done here.”

Q: That doesn’t sound too complicated, but I imagine it’s a little harder getting you stolen fuel onto the market in countries with stricter rules of law?

A: In richer countries, the modalities tend to be more on the financial end. You’ll see them launder the fuel from the illicit market into the legitimate market, and that allows the criminals’ financiers to get quite a good discount. In one case, we found stolen crude coming out of Nigeria was being laundered through an offshore oil facility off the coast of Ghana and then sold on to refineries in Morocco and then sold into the legitimate market in Europe.

Q: Your report points out that the EU alone is losing $4 billion a year in tax revenue from hydroacarbon fraud. What are governments and companies doing to control this?

A: Not a whole lot is generally the answer. But when you see the seemingly benign activity of fuel theft turn into a funding mechanism for terrorism, drug trafficking, or human trafficking, that’s when governments start to pay a bit more attention. There have been a few quick wins. Molecular marking programs allow you to see if the fuel you’re looking at is part of the official national supply or not and to see if it’s been adulterated. More advanced, tamper-proof metering is also proving effective, as you can’t know what’s been stolen unless you know what you have. A Nigerian oil producer, they put in new meters and they discovered they were losing 22 percent of their product between the well head and storage.

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