U.S. Troops Crack Down on Fuel Smuggling
BEIJI, Iraq - U.S. troops in this oil refining center are cracking down on a vast fuel theft and smuggling operation that robs from
Iraq's economy and helps finance the insurgency.
The troops are chasing the smugglers and closely monitoring refinery workers. For American soldiers, it means ending a hands-off approach at the facility and doing jobs that would normally fall to police.
Capt. Adam Lackey of Trafalgar, Ind., said it was a problem that could no longer be ignored because the illicit money helps buy bombs and bullets that kill and maim soldiers.
"Our hand has been forced," said Lackey, of the 1st Battalion, 187th Regiment, 101st Airborne Division. "We're going to make it harder for them, make it less profitable, and we're even going to make it more dangerous."
Before the crackdown began in recent weeks, fuel smuggling from Beiji was so extensive and flagrant that dozens of truck drivers would congregate just outside the refinery's gates. In plain sight, they would swap counterfeit export documents or transfer fuel to unauthorized trucks.
Iraqi officials have long complained about oil smuggling, especially from the Beiji refinery and other sites around the northern oil fields.
In a report last month, the inspector general of the oil ministry, Ali al-Alaak, estimated about $4 billion worth of petroleum products were smuggled out of Iraq last year, including gasoline and crude oil siphoned from pipelines. He described oil smuggling as the greatest threat to Iraq's oil-dependent economy.
The Finance Ministry estimates that up to half of the profits from oil smuggling end up in the hands of insurgents.
So much fuel was disappearing that residents of this Sunni Arab city 155 miles north of Baghdad would routinely wait eight hours or more to buy fuel at gas stations within view of the refinery.
Smuggling is lucrative in Iraq because fuel prices are heavily subsidized by the government. A gallon of regular gasoline costs less than 70 cents. Smugglers make a substantial profit by shipping fuel to
Syria or Turkey, where prices are much higher.
Inside Iraq, because of long lines at official filling stations, street bootleggers can charge double the authorized price to customers who cannot wait.
Insurgents also profit by charging a "protection fee" of $250 to $300 per truck, according to U.S. soldiers quoting drivers. Between 200 to 700 tankers leave the refinery daily, soldiers said. Drivers who don't pay run the risk of being ambushed.
It's unclear whether insurgents run the smuggling rings directly, which would increase their profits even further.
American officers would not estimate the amount of money that ends up in insurgent hands due to smuggling from Beiji. But they said the national government desperately needs all the money it can get to combat the predominantly Sunni insurgency and rebuild Iraq's infrastructure.
"You think about how much money they could be making for the government if they sold it properly," Lackey said. "That's all they got in this country — fuel. That's all they got to sell."
The Beiji refinery had a prewar production capacity of up to 300,000 barrels per day. Since the U.S.-led invasion in March 2003, there have been numerous full or partial shutdowns. Now just keeping the refinery running requires police work, diplomacy and public relations skills.
In March, eight Shiite workers were slain just outside the refinery's gates. Since then, Shiite engineers and workers have been reluctant to work.
During one patrol in Beiji, Lackey met with refinery guards to discuss equipment shortages. An hour later he angrily confronted other guards who had allegedly threatened to turn Shiite engineers over to insurgents.
Minutes later, Lackey pulled into a parking lot filled with dozens of tankers preparing to smuggle away thousands of gallons of gas. Several drivers tried to pull away, leading to a brief chase by U.S. Humvees. Lackey sprinted after one man who fled into the distance.
The crackdown is also an attempt to improve the image of the hundreds of U.S. soldiers in the area. Residents accused the Americans, the only effective force here, of involvement in the black market. How else, they reasoned, could smugglers operate with such impunity?
"We also don't want the perception that we're stealing their fuel," said Lt. Col. Randy George.
To bolster the effort, a battalion of Iraqi soldiers was sent to Beiji recently. Residents view local police as corrupt, but U.S. soldiers express greater confidence in the new Iraqi army soldiers.
The initial weeks of the operation have started to pay off. Lines for fuel are shorter, soldiers said, and about one-fifth of gas stations in Beiji appear to be operating normally.
Soldiers said civilians have begun pointing out the hiding places of smugglers. By contrast, bystanders rarely provide useful information after roadside bomb attacks on U.S. patrols.
U.S. soldiers say insurgent attacks in Beiji have recently spiked, and some speculate it is a reaction to the crackdown and is also intended to distract the Americans from the anti-smuggling campaign.
"They do everything in their power to keep us occupied," Lackey said of the insurgents. "We've ignored the root of the (insurgency) problem, which is the funding."
Iraq's economy and helps finance the insurgency.
The troops are chasing the smugglers and closely monitoring refinery workers. For American soldiers, it means ending a hands-off approach at the facility and doing jobs that would normally fall to police.
Capt. Adam Lackey of Trafalgar, Ind., said it was a problem that could no longer be ignored because the illicit money helps buy bombs and bullets that kill and maim soldiers.
"Our hand has been forced," said Lackey, of the 1st Battalion, 187th Regiment, 101st Airborne Division. "We're going to make it harder for them, make it less profitable, and we're even going to make it more dangerous."
Before the crackdown began in recent weeks, fuel smuggling from Beiji was so extensive and flagrant that dozens of truck drivers would congregate just outside the refinery's gates. In plain sight, they would swap counterfeit export documents or transfer fuel to unauthorized trucks.
Iraqi officials have long complained about oil smuggling, especially from the Beiji refinery and other sites around the northern oil fields.
In a report last month, the inspector general of the oil ministry, Ali al-Alaak, estimated about $4 billion worth of petroleum products were smuggled out of Iraq last year, including gasoline and crude oil siphoned from pipelines. He described oil smuggling as the greatest threat to Iraq's oil-dependent economy.
The Finance Ministry estimates that up to half of the profits from oil smuggling end up in the hands of insurgents.
So much fuel was disappearing that residents of this Sunni Arab city 155 miles north of Baghdad would routinely wait eight hours or more to buy fuel at gas stations within view of the refinery.
Smuggling is lucrative in Iraq because fuel prices are heavily subsidized by the government. A gallon of regular gasoline costs less than 70 cents. Smugglers make a substantial profit by shipping fuel to
Syria or Turkey, where prices are much higher.
Inside Iraq, because of long lines at official filling stations, street bootleggers can charge double the authorized price to customers who cannot wait.
Insurgents also profit by charging a "protection fee" of $250 to $300 per truck, according to U.S. soldiers quoting drivers. Between 200 to 700 tankers leave the refinery daily, soldiers said. Drivers who don't pay run the risk of being ambushed.
It's unclear whether insurgents run the smuggling rings directly, which would increase their profits even further.
American officers would not estimate the amount of money that ends up in insurgent hands due to smuggling from Beiji. But they said the national government desperately needs all the money it can get to combat the predominantly Sunni insurgency and rebuild Iraq's infrastructure.
"You think about how much money they could be making for the government if they sold it properly," Lackey said. "That's all they got in this country — fuel. That's all they got to sell."
The Beiji refinery had a prewar production capacity of up to 300,000 barrels per day. Since the U.S.-led invasion in March 2003, there have been numerous full or partial shutdowns. Now just keeping the refinery running requires police work, diplomacy and public relations skills.
In March, eight Shiite workers were slain just outside the refinery's gates. Since then, Shiite engineers and workers have been reluctant to work.
During one patrol in Beiji, Lackey met with refinery guards to discuss equipment shortages. An hour later he angrily confronted other guards who had allegedly threatened to turn Shiite engineers over to insurgents.
Minutes later, Lackey pulled into a parking lot filled with dozens of tankers preparing to smuggle away thousands of gallons of gas. Several drivers tried to pull away, leading to a brief chase by U.S. Humvees. Lackey sprinted after one man who fled into the distance.
The crackdown is also an attempt to improve the image of the hundreds of U.S. soldiers in the area. Residents accused the Americans, the only effective force here, of involvement in the black market. How else, they reasoned, could smugglers operate with such impunity?
"We also don't want the perception that we're stealing their fuel," said Lt. Col. Randy George.
To bolster the effort, a battalion of Iraqi soldiers was sent to Beiji recently. Residents view local police as corrupt, but U.S. soldiers express greater confidence in the new Iraqi army soldiers.
The initial weeks of the operation have started to pay off. Lines for fuel are shorter, soldiers said, and about one-fifth of gas stations in Beiji appear to be operating normally.
Soldiers said civilians have begun pointing out the hiding places of smugglers. By contrast, bystanders rarely provide useful information after roadside bomb attacks on U.S. patrols.
U.S. soldiers say insurgent attacks in Beiji have recently spiked, and some speculate it is a reaction to the crackdown and is also intended to distract the Americans from the anti-smuggling campaign.
"They do everything in their power to keep us occupied," Lackey said of the insurgents. "We've ignored the root of the (insurgency) problem, which is the funding."
posted by Marko at 5/10/2006 06:16:00 AM
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