Unabated fuel smuggling forces gas stations to close

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ZAMBOANGA CITY: The unabated smuggling of cheaper fuel from Sabah in Malaysia has affected gas station owners in the southern province of Sulu.

Many of them have closed their gas stations after a drastic drop in sales over cheaper, but dirty gasoline and diesel fuel being sold by illegal and unscrupulous traders. Gasoline peddlers also sprouted like mushrooms in the town of Jolo where they illegally sell fuels in one-liter bottles much cheaper than local pump prices.

With daily losses, legitimate gas station owners stopped selling fuels until authorities stop the rampant smuggling of gasoline and diesel from Sabah.

Energy Secretary Jericho Petilla on Sunday said he received reports that the smuggling activities has ceased after Malaysian authorities imposed a stricter patrol is Sabah near the southern Philippine border following the spate of intrusion by kidnappers in the oil-rich Malaysian state.


“We got reports that Malaysian has actually tightened the border to the extent that the delivery (of smuggled fuels) to Sulu has been affected,” he said.

With gas stations closed and stricter border measures in Sabah, smuggling activities were halted and the prices of gasoline and diesel being sold by unscrupulous traders and peddlers have soared up and are being sold as high as P120 a liter.

“What really discouraged the local depot from supplying Sulu in the past was that they are competing against with (illegal) fuel (suppliers) that are not paying taxes (to the government). But now that there is a tight supply and there is nothing coming from Sabah then they might be encourage to do more frequent deliveries (of fuels),” Petilla said.

“We have an open market because they are deregulated and anybody can (legally) supply Sulu at this point but I think at one point I am trying to look at the history of suppliers in Sulu, the big oil companies for example, I don’t think they exist there at the moment because at one point they really cannot compete with the prices of fuels coming from Sabah but it has been cut off, we don’t know if its temporary or permanent at this point,” he added.

“But at this point is they don’t have the supply coming from Sabah and what we can do is that there is a delivery on Monday (July 14) that should ease the (shortage of fuel) supply in Sulu but what we can request because this is a business decision of the local companies to deliver more,” Petilla said.

There were also reports of rampant smuggling of fuels from Sabah into the neighboring province of Tawi-Tawi. Both Sulu and Tawi-Tawi are under the Muslim autonomous region in Mindanao.

There was no immediate statement from the Bureau of Customs about the unabated smuggling activities in the provinces.

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