RAMALLAH, West Bank — So far, 2017 has been an exceptionally busy year for smugglers moving adulterated fuel from Israel to the West Bank. The fuel is not only causing damage to the machinery in which it is used, but also to the coffers of the Palestinian Authority (PA), which loses out on tax revenue that would normally be paid on regulated fuel.
On Sept. 17, the Preventive Security Service (PSS) announced the closure of an unlicensed point of sale for fuel in the Ramallah governorate. Earlier, on Sept. 8, the Palestinian Customs Police detained a smuggler with 3,000 liters of adulterated fuel headed for a gas station north of Ramallah. The customs police, in cooperation with the PSS, had on Aug. 30 shut down an unlicensed gas station in the Ramallah governorate, seizing its tanks and pumps. On Aug. 21, the customs police confiscated some 10,000 liters of smuggled fuel for noncompliance with specifications and standards and seized three gas pumps at two unlicensed gas stations in the town of al-Ram, north of Jerusalem. That same day, the PSS shut down an unlicensed gas station in Ramallah.
Luai Bani Odeh, head of public relations and information with the customs police, told Al-Monitor, “Since the beginning of the year until Aug. 31, 82,000 liters of adulterated fuel have been seized compared to 58,300 liters in 2016.”
Odeh said that adulterated fuel — fuel mixed with spent oil or a hydraulic fluid — is being smuggled from Israel into Area C, which is under full Israeli security and administrative control. From there, it is smuggled further into Palestinian cities and towns for distribution to individuals and unlicensed gas stations.
Odeh noted that adulterated fuel causes damage to machinery and vehicles because it does not burn efficiently, leaving compounds behind in engines. Such fuel also causes damage to the national economy by not generating taxes for the treasury. Under the Paris Economic Agreement signed in 1994, a tax was imposed on the price of fuel in both Palestine and Israel. This tax accounts for about 90% of the basic price of a liter of fuel. In addition, the PA adds 15% VAT.
The General Directorate of Petroleum, which operates under the PA's Ministry of Finance, is responsible for all matters related to oil and petrochemicals in the West Bank and the Gaza Strip. Teams with its Department of Monitoring and Quality Control at the directorate conduct inspections for the process of granting licenses, preventing smuggling, monitoring the quality of oil derivatives and controlling the quality of fuel on the Palestinian market distributed to stations.
“There appear to be gangs involved in the smuggling of fuel, especially as they all come in vehicles with an Israeli license plate [yellow] to Area C,” Fuad al-Shobaki, head of the General Directorate of Petroleum, told Al-Monitor. “All of the smuggled amounts are transported from inside Israel.” He believes Israeli authorities are turning a blind eye to the smuggling because it does not negatively affect Israel.
Odeh explained how smugglers have adopted several methods for transporting fuel to circumvent PA controls. One is to fill wastewater treatment tanks or plastic balloons with fuel and transport it in private or public vehicles. Others include filling large truck containers, water tanks, refrigerated cars and fuel tanks of electric cars.
As the Palestinian security services are prohibited from pursuing smugglers in Area C without Israeli permission and cooperation to prevent fuel from reaching PA-administered territories, they have instead intensified monitoring and inspection operations in the areas it controls.
“We are sending patrols to the entrances of cities, villages and governorates, and we’ve created a customs intelligence department to work on obtaining data from its own sources,” Odeh explained. “In addition to this, we rely on citizens' complaints and the work of the Monitoring and Quality Control Department, whose members wear civilian clothing [working undercover] to monitor smugglers and entrances to cities, crossings and points of contact with Israel.”
The PA has apparently been unsuccessful in pursuing holders of Israeli identity cards involved in smuggling operations, and others whom it can pursue and actually catch tend to receive lenient treatment.
“Sanctions need to be toughened to deter those involved,” Odeh said. “Traffickers and smugglers know how much financial profit they can make from smuggling and will not be deterred except through severe penalties.” Odeh was referring to the absence of a legal provision specific to such operations, although parties could theoretically be charged under other statutes on the books.
Tareq Natsheh, owner of the Ramallah-based al-Huda Fuels Co., told Al-Monitor, “Smuggling fuel causes damage to all of us, to the import and distribution companies, the Palestinian citizens, the Palestinian economy and the public treasury.” He said residents have the most important role to play in exposing fuel smuggling operations. They should inform officials of fake products that they know of, especially in Area C where smugglers feel protected from accountability.