Fuel smugglers have Cambodia over a barrel

FEATURE-Fuel smugglers have Cambodia over a barrel

By Ek Madra, Reuters

PHOUM KOMPONG, Cambodia (Reuters) - As night falls over the watery
wastes of the Cambodia-Vietnam border, the gasoline people start their
day.

Rainy season floods give the Mekong Delta smugglers myriad routes
through the rice fields where 35 years ago North Vietnamese communist
guerrillas battled U.S. soldiers guarding the gateways to Ho Chi Minh
City -- what was then Saigon.

Soaring international crude oil prices, which have pushed up pump
prices in impoverished Cambodia, have made an industry out of smuggling
from Vietnam, where state subsidies hold increases in check.

"If the customs men block off one way, we just go another way," said
35-year-old Yen, dragging a plastic barrel of gasoline off a rowing
boat near Phoum Kompong, a waterlogged village around 45 miles
southeast of Phnom Penh.

Around her in the gloom are scores of other wooden boats, many of which
will be loaded with gasoline and diesel from the southern Vietnamese
province of Chau Doc and destined for Cambodia, which has to import
nearly all its energy.

After docking as much as 12 miles inside Cambodia, the boats are met by
scores of pony carts -- an increasingly popular distribution network
given the sharply escalating cost of running a vehicle.

With scant resources at its disposal -- and endemic corruption in its
ranks -- the government of the Southeast Asian nation, still recovering
from the Khmer Rouge genocide of the 1970s, is powerless to resist.

"I am not really a smuggler," said 43-year-old pony cart driver Pou
Rin, sitting under a coconut tree waiting for his first run of the
evening. "I'm just hired to do this."

With a flick of the whip, man and beast disappear off into the darkness
down the potholed track, the jangling bells around his pony's neck
shamelessly advertising their activities.

"JUST DO THE MATHS"

Paid $1 to transport as much as 660 pounds of gasoline -- a run they
can repeat up to five times a night -- the pony carters are making big
money in a country where around one third of the 13 million population
lives on less than $1 per day.

"My horse is my bread winner," said another carter, puffing on a
cigarette in the darkness.

Furthermore, customs officials believe the widening margins in gasoline
prices between the two countries in the past 18 months have fueled a
major increase in activity in a region where cross-border contraband
has been a way of life for years.

Last month, the price of one quart of high-octane "Super" gasoline in
Phnom Penh rose from $0.82 to $0.92, whereas in Vietnam, it costs
10,000 dong ($0.63) -- despite three price rises already this year.

Smuggled gasoline, therefore, which is sold throughout the country from
barrels at road-side kiosks or informal filling stations, can be priced
at a hefty mark-up to Vietnam but an equally hefty discount to its
legitimate equivalent.

For locals, it is madness not to get involved.

"If I didn't do this, I don't know what I'd do," said 40-year-old Ry
Sok Reang, sitting on a roadside gazing out at the flooded rice fields
waiting for her next shipment to come in.

There are no estimates of the size of the gasoline smuggling industry,
but the Finance Ministry says 2.5 million tons of petroleum products
have been confiscated since 2004.

Compare that to Cambodia's annual official fuel imports of 1 million
tons, according to the National Petroleum Authority, and it is clear
that smuggling is a major industry.

FUELING VIOLENCE

The larger the amount of money tied up in smuggling, the more violent
it is becoming, police and customs officials fear.

Besides regular clashes reported between smuggling gangs and customs
officials, several people have been killed in car crashes as vehicles
try to evade capture.

According to Kung Samrech, a customs official, the smugglers are
sophisticated enough to use mobile phones to tip each other off about
patrols. If cornered, they are also prepared to fight.

"It is very difficult to stop them. They use knives, sticks and
machetes to attack us," he said.

Other customs officers complain of being overstretched and no match for
the organized criminal ranks arrayed against them.

"We can't be everywhere all the time," said customs patrolman Yim
Pheang, carrying an AK-47 and life jacket. "When we patrol the delta
they disappear. When we go back to the office, they come out again."

Besides the occasional loss of life, not to mention the loss to the
Cambodian tax department, the smuggling also threatens the delicate
ecology of the lower Mekong, often described as the "rice bowl of
Vietnam."

Gasoline and diesel is often sealed inside giant plastic drums to be
dragged underwater to avoid detection, but the oil slicks on the
surface of many waterways and the stench of gasoline fumes across the
delta suggest much of it is leaking out.


09/20/05 08:00 ET


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