A government crackdown on the smuggling of petroleum products such as diesel fuel by truck has sparked a rise in the smuggling of lubricants—cartons of which can be easily transported by car or motorbike, officials say.
About 400,000 liters of motor oil and other lubricants are being smuggled each year across the Cambodian-Thai border, much of it now on motorbikes, said the head of the local office of a multinational petroleum company.
“Forty percent of Caltex lubricants sold in Cambodia are not sold by Caltex Cambodia,” Kit Heffner, general manager of Caltex Cambodia Ltd, said last week. “It’s being carried over on taxis or by people riding motorbikes, just a few cartons at a time. But it’s costing the company about $300,000 per year in earnings.”
Although officials at the Ministry of Finance declined to comment, a provincial customs official confirmed Monday a rise in small-scale smuggling of petroleum products along the Cambodian-Thai border.
“Smugglers [of petroleum products] are crossing the border on motorbikes and hiding the smuggled goods in fruit and other items,” Van Sarun, a deputy customs officer of Battambang, said Monday. “Small-scale smuggling increases during the dry season because smugglers find it easier to cross the border along hidden pathways.”
Van Sarun said smugglers who are caught are being fined equal to nearly double the value of the smuggled products.
Heffner blames the country’s relatively high customs duties, which give smugglers an incentive to purchase lubricants elsewhere and sell them at a few dollars profit in Cambodia.
“As things stand, the government is losing about $1 million a month to smugglers of petroleum products,” Heffner said.
C H Lim, general manager of Shell-Cambodia, agreed about the problem on Monday. “By our own estimate, 30 percent of the overall [petroleum goods] market is smuggling,” Lim said. “We have been looking at the the duty structure for lubricants, which appears to encourage smuggling. And we have been talking to [the government] for some time about reducing the duties.”
Most smuggled petroleum products arrive from Thailand, but a substantial amount also make their way from Singapore and Malaysia, through Sihanoukville, and from Vietnam via the Mekong River.
According to Heffner, an estimated 120 million liters of petroleum and diesel fuel products are smuggled into Cambodia each year.
(Additional reporting by Saing Soenthrith)
