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Bureau of Customs (BOC) agents intercepted a massive fuel smuggling operation at La Union Port on June 19, seizing nearly ₱220 million worth of untaxed petroleum from a motor tanker and two delivery trucks. The raid led to the arrest of suspects linked to the illegal shipment.
The fuel seizure followed a joint operation by the Bureau of Customs, the Philippine Coast Guard, and the National Bureau of Investigation. Acting on reports of a “paihi” scheme—an illicit method of siphoning fuel—authorities caught the motor tanker MT Bernadette in the act of transferring diesel to a lorry truck. Two trucks were later found carrying fuel taken from the vessel.
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Arrests made
An initial assessment revealed that the motor tanker was carrying approximately 200,000 liters of diesel, while the two lorry trucks held a combined total of 59,000 liters.
During the operation, authorities apprehended 21 individuals, including the motor tanker’s 10 crew members who failed to present documents proving the fuel transfer was legal. The rest were identified as drivers, port workers, lookouts, and other suspected accomplices linked to the smuggling activity.
Those arrested, including the tanker’s owner, captain, crew, and individuals linked to the trucks and confiscated fuel, will face administrative penalties and legal action for breaching the Customs Modernization and Tariff Act and the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
BOC Commissioner Bienvenido Rubio emphasized the importance of stepping up efforts to stop the entry of unmarked fuel into the country, citing both the economic losses it causes and the potential risks it poses to public safety.
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Crackdown on fuel smuggling
The BOC uses chemical markers to verify if fuel products have met tax requirements. If a sample contains less than 95% of the required marker, the importer must first pay the correct duties before settling any penalties. Unmarked, tampered, or counterfeit-marked fuel is automatically subject to taxes, fines, and legal consequences.
Last 2024, the government announced that fuel marking had generated nearly ₱989 billion in tax revenues over its first five years. With the program’s contract ending this year, total collections are expected to exceed the ₱1-trillion mark.
Between September 2019 and September 13, 2024, authorities tagged a total of 85.9 billion liters of fuel with a chemical marker, indicating compliance with required import duties and tax obligations.
Fuel firms enrolled in the government’s fuel marking program include Petron, Unioil, Shell, Phenix, and Jetti, among others.
Over the past years, diesel made up nearly three-fifths of all marked fuel nationwide, while gasoline comprised around two-fifths. Kerosene accounted for just 0.4%. Despite these efforts, the BOC continues to monitor and guard against fuel traders attempting to sidestep tax obligations.
Although initially delayed, the fuel marking program officially rolled out in September 2019, in line with the TRAIN Law that came into force in 2018.
Back in 2016, government estimates revealed that oil smuggling and product misdeclaration were costing the country an estimated ₱26.9 billion in lost tax revenues each year.
Prior to the rollout of fuel marking, revenue losses from oil smuggling were estimated to be even higher by separate studies. The Asian Development Bank (ADB) placed the annual losses at ₱37.5 billion, while local oil industry stakeholders pegged the figure at ₱43.8 billion.
Sources:
https://newsinfo.inquirer.net/2073160/p219-5-m-smuggled-fuel-seized-at-la-union-port-21-nabbed
https://mb.com.ph/2024/9/18/five-year-anti-oil-smuggling-drive-nabs-p989-billion-boc