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The Fuel Cartels

The west coast of Libya is one of the most beautiful coastlines in North Africa. For centuries the local inhabitants have used this beautiful and important open highway to trade and barter with the other side.

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This old tradition is alive and thriving even more than before. With the collapse of governance and the disappearance of law and order, the sky is the limit for whoever wants to take advantage of the situation by buying and selling anything that comes to hand, no matter the implications on the locals daily lives.

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Two neighbouring towns, Zwara and Sabratha, have stepped up in implementing this process. Both with old traditions in fishing and a long history of using the sea to make a living. Sabratha, historically famous for its well preserved Roman ruins and amazing sandy beaches and Zwara, a popular amazigh “barbar” town with a strong sense of its own culture and a history of struggles against its neighbouring Arab towns.

Cut to present day, considering everything that is wrong in Libya, one of the few industries that has flourished since the topple of Gaddafi is the smuggling of goods in and out of the country. One of the more profitable goods smuggled out is government subsidize fuel to European union members. Mainly, Malta and Spain. The reason being that fuel costs in
Libya are so low, around 0.10 €/L. The fuel is sold to the European connection for about 0.60 €/L but the payment is very rarely made in cash.

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Instead, the exchange is made with liquor. A good trade since alcohol is prohibited in Libya hence, allowing the European brands to weld twenty times the market price for a bottle of whisky. For example, 10,000 litres of Libyan fuel would be sold for 6,000 €. The smugglers will ask for the payment to be in for example (Johnny Walker red label whisky) at about 12
€ a bottle. That would be 500 bottles. In turn, that would have around 200 LD in street value for each bottle so in simple math, that would be 100,000 LD with the original fuel cost for the Libyans at 1,500 LD, a profit of 98,500 LD. Mind boggling figures- and this is a minor example.

What makes this trade a little harder to be involved in than the human smuggling is that fuel smuggling would require some form of infrastructure for the smugglers. First you need a large fishing vessel that has to be converted to hold a large amount of fuel as well as large tanks on land to store it. Besides that, the most important part for the smuggles is to secure a fuel station licence that will guarantee a direct supply from the national refinery for lower prices.

They also need to consider the quantities they can order in without effecting local fuel stations and supply to residents. Sabratha and Zwara have competed together in trafficking for years but with Zwara’s heavy involvement in fuel for alcohol trades, the small town has become a major player in the smuggling business. Sabratha’s smuggling cartels have tried their hand in this very profitable business but were less successful than their neighbours as Sabratha is a much larger city. but with less suitable large vessel ports. More importantly, the local population is more religiously strict. The notion of human smuggling is plausible but the involvement of alcohol is unacceptable.

The envy for the amount of cash the Zwara cartels have started to amass resulted in some
unpleasantness between the rivals. This resulted in many retaliations from both cities. Each trying to disrupt the other’s business. After a meeting was organized between the rival cartels, the fuel smuggling operation has been reformed and structured to keep everyone happy. The main points of this agreement are as follows:

• The main smuggling port for the fuel is under Zwara’s control
• The main militia in Al-Zawiya, where the refinery that supply the fuel,
gets a cut from profits to keep the flew of fuel tankers safe to exit the
refinery and make there way to Zwara
• Sabratha is allowed to have vessels to smuggle fuel in Zwara, but has to
have a local smuggler involved as part owner to operate out of the
Zwara port
• Phantom fuel stations in and around Zwara are to be set up in joint
partnership with other smugglers from Sabratha and Al-Zawya to apply
for a licences that would allow them to place orders of fuel from Al-
Zawya oil refinery at subsidized prices around 0.13 LD.
• Payments to local officials in Zwara and Sabratha are to keep the
authorities from investigating any smuggling (not only cash but family or
friends involvement as well. that allows for intimidation and violence to
be used)

Things changed with the formation in late 2012 of the Al-Mulathamoon (the masked) brigade in Zwara, a militia group that started to fight against organized crime, like drugs and alcohol, and use and distribution as well as human trafficking. The brigade largely made of local civilians who fear identification and retribution. The group covered their faces and were sworn to secrecy. Although, the brigade did not stop all smuggling it did at least affect the smuggling of alcohol as a number of the smugglers stopped exchanging fuel with alcohol to stop being targeted by the vigilante group.But The trade continued to flourish

With the large amount of money being involved, the instability of the Libyan financial market and the lack of security in the country, the fuel cartels had a problem of what to do with the huge amount of cash they have assembled cue a middle man from Spain who advised the smuggling cartels to start moving there cash to Spain and to invest in property and set up front companies to money launder the income from the illegal trade, so company where set up in Barcelona and Marbella as import export and used it to funnel money into Spain most common way was to set up companies to buy used cars and trucks and heavy equipment that cost a lot of money and to send them back to Libya in reality some is used for that the rest will be used to bay houses and apartments all-around Spain using contacts and local middle men to register investments and in the proses even apply for Spanish residency.

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Recently NATO and European Union have deployed their Navy just off the Libyan coast to keep a close eye on the growing influence of extremists inthe country but they have made no serious attempt to stop illegal fuel trade and done nothing to disrupt the cash flow generated by it, with many of the southern European nations economies going through hard time a large number of Libyans are asking: is the EU turning a blind eye to this illegal
trade or are they part of the conspiracy to deplete Libya of its wealth?

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