"Petrol smuggling occurs in many places, especially in sea regions in the central provinces of Thanh Hoa, Nghe An, Ha Tinh, the northern city and provinces of Hai Phong, Quang Ninh, Nam Dinh, and the southern provinces of Ba Ria–Vung Tau and Mekong Delta provinces,"— Photo cafef

HCM CITY (Biz Hub) — Petrol smuggling via sea waters has brought huge profits to illegal ships, and has become increasingly difficult to control, the Viet Nam Petroleum Association has said.

"Petrol smuggling occurs in many places, especially in sea regions in the central provinces of Thanh Hoa, Nghe An, Ha Tinh, the northern city and provinces of Hai Phong, Quang Ninh, Nam Dinh, and the southern provinces of Ba Ria–Vung Tau and Mekong Delta provinces," Trinh Quang Khanh, vice chairman of the association, was quoted as saying in Dau Tu (Viet Nam Investment Review) newspaper.

The Viet Nam Marine Police discovered on Sunday that the "Hoa Binh 06" ship, which was docked at Sao Mai Bay in the southern coastal city of Vung Tau, was carrying 70,000 litres of diesel oil without proper legal documentation.

In late August, the Viet Nam Border Guard stopped two ships, the My Hoa 03-AG10558H and PV Oil Trans 04-SG6413, which were illegally carrying 500,000 litres of petrol and diesel oil via sea waters near HCM City.

The General Department of Customs, in co-operation with the Ministry of Public Security's General Department of Security II, broke up a petrol smuggling ring led by Nguyen Truong Son, deputy director of Hoang Son Limited company in the central city of Thanh Hoa. It had smuggled tens of thousands of tonnes of petrol.

Smugglers have become more sophisticated and organised by setting up companies, and hiring gangsters to board boats masqueraded as fishing ships.

In addition, smugglers carry blank receipts to cope with authorities in case of searches.

Huge profits are driving the increase in smuggling. The price for diesel oil in Viet Nam is often higher than other neighbouring countries like Malaysia and Indonesia.

In addition, taxes and fees account for 43 per cent of the petrol price. Smugglers can export petrol to countries which have higher petrol prices and import petrol from other countries which have lower prices like Thailand, Cambodia, Laos and China.

Smuggling profits from each litre of diesel oil in the domestic market ranges from VND3,000 – 5,000 (15-25 cents).

According to the Viet Nam Petroleum Association, in the southernmost province of Kien Giang, there are around 250,000,000 litres of oil being used for seafood exploitation and most of these were illegally imported.

The State loses VND1.2 trillion (US$60 million) a year in petrol taxes because of petrol smugglers, experts have estimated.

The Hoang Son company illegally imports 5,000 – 10,000 tonnes of petrol each month, causing tax losses of VND20 – 25 billion ($1 – 1.2 million). The State budget has lost tens of millions of US dollars.

In another case, the Ninh Thuan NT90139 TS ship bought petrol from Thailand's Nang Nual for VND18,000 (85 cents) per litre and sold it for VND22,000($1).

Each year, the Ninh Thuan ship can smuggle 600,000 litres of oil and earn a profit of VND240 billion ($12 million).

"Management policy on petrol imports is still loose and State offices must become more strict," said Nguyen Van Can, deputy head of the General Department of Customs.

Under current regulations, if authorities discover and hold commodities without receipts, they must check them within three days.

"This is a good chance for smugglers to fulfill all necessary papers," Can added.

Recently, the Viet Nam Petroleum Association asked authorities to review all policies concerning management of petrol imports.

"A central committee should be created to cope with the increased petrol smuggling," Trinh Quang Khanh said. — VNS