Fuel Smuggling Grips Region

A gasoline and diesel black market thrives in Burma, while an illicit border fuel trade haunts Vietnam and Cambodia.

People in Burma are grappling with a serious fuel shortage on the back of surging gasoline and diesel prices, but the commodity is being smuggled into China for higher prices there.

Compounding the problem is a black market for fuel in Burma itself, with residents having to wait for hours and dig deeper into their pockets to pay for daily supplies.

The higher fuel prices have sent food costs soaring, hurting average consumers in this impoverished military-ruled nation.

"Diesel is being smuggled out to China from Burma, because the oil price in China is going up. Three months ago, gasoline was smuggled to China, but it is diesel now," said a resident from Muse, a Burmese town along the porous border with China.

He said that only people "who have connections to the authorities" can transport the fuel across the border, suggesting corruption is driving the illicit trade.

Fuel is a sensitive issue in Burma. In 2007, when gas prices soared, monks took to the streets of Rangoon to protest in what became known as the "Saffron" revolution, drawing thousands of people. The revolt was put down by security forces who killed at least 31 people and beat and detained hundreds.

Burma's neighbors are also reeling from higher fuel prices that have led to smuggling amid concerns that sweeping unrest in the Middle East and Africa will limit oil production and send oil prices even higher. Some countries provide subsidies to cushion costs.

Queue up

A truck filled with gas tanks passes a roadside gasoline stand in Rangoon, Feb. 22, 2011.

In the former capital Rangoon, the country's key commercial center, motor vehicles often have to queue up for miles overnight to get gasoline.

"You have to be in line for at least three hours to get gasoline from the gas station. Because of the gas price hike, all commodities prices are skyrocketing," a Rangoon resident said.

A street vendor selling fried rice said, "I sell fried rice for 300 kyat (about 30 cents) per plate. Trishaw [motorized three-wheeled cab] drivers told me they can't buy my food anymore, as they can't afford it."

A resident in Mandalay, Burma's second-largest city, said gasoline prices shot up from 4,000 kyat to 4,800 kyat (U.S. $4.00 to U.S. $5.00) within a week. Street vendors who buy and sell gasoline are being pursued by police."

A resident from Maubin in the rice-growing Irrawaddy division said that gas stations open at around 8 a.m.

Half an hour later, he said, prices rise far above official levels.

"We have to pay street price after 8:30 a.m. All gas stations in Maubin are owned by Ayeyar Shwewah company, a company run by two sons of Shwe Mann, who is a current Parliamentary chairman, so nobody dares to complain."

Vietnam, Cambodia

In Vietnam, fuel is siphoned off and smuggled across the border to Cambodia to cash in on the higher prices, while gasoline smuggling from Thailand to Cambodia is also common.

A Vietnamese man calling himself Chi, who has long done business in Cambodia, said gas smuggling is a "daily business" in Cambodia.

"They smuggle gas to Cambodia via sea, then on land. That is for big business. But for small shipments, people smuggle over the land border, so much that we don’t know how much gas is smuggled to Cambodia every day."

Xaymun, a Cambodian woman, said gas prices jumped recently.

“I have heard that gas is brought here from Vietnam. I heard that the authorities could catch the smugglers, but then they get bribed and they let the smugglers go.”

Operating hours

Vietnamese authorities plan to limit the operating hours of filling stations along the border to only 12 hours beginning from 6 a.m. to combat smuggling.

Vehicles traveling from Vietnam to Cambodia will be allowed to buy enough fuel to travel only 50 to 100 kilometers (31 to 62 miles) under the plan, according to the VietNamNet Newspaper report.

Reported by the RFA Burmese, Cambodian, and Vietnamese services. Translation by Khin May Zaw, Viet Ha, and Sum Sok Ry. Written in English by Parameswaran Ponnudurai.