Sunday, December 9, 2007

Vietnam's Cambodian oil smuggling operations

Oil and petrol ‘bleed’ through border gates

VietNamNet Bridge – A lot of petrol and oil is being illegally exported to Cambodia, as the petrol price there is VND3,000/litre higher than that in Vietnam.

Cambodians dry up the well

A resident in the southern province of An Giang said the petrol price in Cambodia is $1/litre and the oil price is nearly the same, consequently, Cambodians have been crossing the border to purchase cheaper petrol they can sell at home for a tidy profit.

On So Thuong River in Dong Thap province, many boats can be seen carrying petrol and DO oil to Prey Veng province in Cambodia.

Meanwhile, Vietnamese farmers cannot purchase oil for their pumps because filling stations and privately owned petrol shops only want to sell oil and petrol to Cambodians who will pay more.

A lot of Vietnamese farmers now have a new job: they carry petrol and oil for Cambodians. On average, an ex-farmer may earn VND40-50,000 if they carry 60 litres of petrol or oil. Meanwhile, Vietnamese tobacco smugglers have shifted to the oil trade which is much more lucrative.

Tran Minh Tien, Head of the Ha Tien Border Gate’s Customs Agency, acknowledged that his agency cannot stop the illegal export of petrol.

He said that there are many reasons that encourage illegal petrol exports. While the petrol in Vietnam is cheap thanks to the Government’s subsidization scheme, the price in Cambodia is much higher as it follows global price fluctuations.

There are numerous filling stations along the N1 road in Kien Giang province, but the stations are not open during the day. Nguyen Van Na, a farmer in Tan Khanh commune, complained that he could not buy oil for his harvester, saying that petrol distributors only work in the evening and only sell petrol to Cambodians.

The An Giang Market Control Taskforce said that it has discovered several illegal export rings so far this year, seizing nearly 30,000 litres of oil, while Kien Giang and Dong Thap provinces seized 5,000 litres. However, Mr Tien said this figure is insignificant compared to the amount of illegally exported product, adding that their confiscations are just the ‘tip of the iceberg’.

“Our staff is too small to deal with the strong force of illegal exporters,” Mr Tien said.

The Ministry of Finance’s latest move was to issue the decision to increase A92 petrol retail prices on the domestic market by a maximum of VND 1,700 a litre and oil prices by VND1,500-VND1,600 a litre to VND13,000/litre. Vietnam announced it would float the petrol price back in mid 2007 and the Government subsidy programme is essential to curbing the inflation rate.

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