DOE: Oil smuggling on the rise

Posted at 08/19/2014 7:44 AM

MANILA - Oil smuggling is again on the rise across the country especially in Mindanao, prompting the Department of Energy (DOE) to closely coordinate with the Bureau of Customs (BOC) to address concerns of oil industry players.

Energy Secretary Carlos Jericho Petilla yesterday said smuggling remains a problem that cannot be curtailed by the energy department alone.

“Small and big smuggling are the same. They cause havoc to economies. However, how this should be curtailed is really beyond our powers. What we are doing though is coordinating with Customs as far as data sharing is concerned,” Petilla said.

Oil companies estimate that P20 billion to P30 billion is lost to oil smuggling every year.

An oil industry source cited some hotspots of oil smuggling in the country, such as Phividec in Misamis Oriental, Subic, Zambales, Davao, Zamboanga and Bataan.

According to the source, the oil industry may collapse if the illegal activity would not be addressed.

“Low volumes, businesses closing down, prices not dictated by the market, these cases are not isolated in Sulu. We encounter these year-in-year-out because of rampant smuggling. In fact, an industry collapse is not far-fetched if this illegal activity will be left unchecked,” one oil industry source said.

However, the local oil industry recently scored a temporary victory against smugglers in Mindanao, particularly in Sulu, when Malaysian authorities tightened border security in Sabah, preventing the influx of smuggled fuel from Malaysia to the Philippines.

“We are encouraged by Malaysia’s move to tighten security in Sabah, which greatly benefited station owners in Mindanao. We hope that our own government can do the same and increase monitoring to stop these oil smugglers across the country,” the source said.

In the provinces, oil players said some legitimate oil companies have been forced to close, as they can no longer compete with these illegal traders.