Fuel smuggling under the spotlight in Libya

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Libya’s National Oil Corporation (NOC) is considering using a chemical marking system to help trace oil products smuggled out of the country, its chairman said.

Mustafa Sanalla called on a European Union naval mission to combat smugglers by seizing their ships in the Mediterranean. He said the United Nations should consider sanctioning smugglers and urged Libya to reform massive subsidies allowing fuel to be sold for as little as two to three US cents a litre.
“Fuel smugglers and thieves have permeated not only the militias which control much of Libya, but also the fuel distribution companies which are supposed to bring cheap fuel to Libyan citizens,” Sanalla told an inaugural Oil and Fuel Theft conference in Geneva.
“The huge sums of money available from smuggling have corrupted large parts of Libyan society,” he said, according to a copy of his speech.

State-run NOC is looking at adding molecular markers to subsidised fuel to help Libyan and international law enforcers including Europol, CEPOL and Interpol identify smugglers, Sanalla said.

Fuel can be tracked by using chemical markers that bind to fuel molecules.

Smuggling networks flourished amid the political turmoil and armed conflict after Libya’s 2011 uprising. Groups are often involved in multiple types of smuggling, making huge profits from illicit sales of fuel and transfer of migrants to Europe.

Up to 40% of fuel refined in Libya or imported into the country is stolen or smuggled, according to the NOC. Libyan vessels smuggle mainly diesel to international ships offshore, while gasoline is diverted to roadside sellers or smugglers who operate across Libya’s land borders.

The practice costs the Libyan state one billion Libyan dinars per year, or $750 million at the official exchange rate, NOC estimates.

Action taken so far — including Italian prosecution and US sanctions against smuggling networks as well as a ditch and berm built by Tunisia on its border with Libya — had “not been enough to create a major disincentive for fuel smugglers” Sanalla said.

Local officials say they are trying to crack down on fuel smuggling fuel is still allocated to non-operational or “ghost” petrol stations. Prices are among the lowest in the world, though rampant smuggling means petrol shortages are common and Libyans often pay a higher, black market price.
“Fuel smugglers are well-armed and well-resourced. Every day their grip on regions of Libya – and on neighbouring countries who receive smuggled and stolen Libyan fuel – becomes stronger and more institutionalised,” Sanalla said.



He called for the mandate of the EU naval mission, Operation Sophia, to be extended to combat smuggling of refined fuel as well as oil, saying much illegal activity could be traced by radar or satellite and was concentrated at Hurd’s Bank anchorage just outside Maltese territorial waters.