Is Oil Smuggling and Organized Crime the Cause of Greece’s Economic Crisis?


Source: http://www.sott.net

Jen Alic
Oilprice.com

Greece's long tradition of oil smuggling and breaking oil embargoesOil smuggling is embedded into the social, political and economic fabric of Greece, with annual revenues generated from illegal fuel smuggling reaching €3 billion euros as of 2008, and some sources say that although Greece imports up to 99 percent of its fuel needs, it still manages to export more than it imports.

Greece thrives on its shipping industry and one of its main contraband markets is petroleum. Greek regulations have shipping oil priced at one-third the price of automotive and home heating oil. In response, smugglers transform low-cost “shipping oil” into higher-priced home and automotive oil, generating huge profits. The practice requires a vast criminal infrastructure including illegal depots near ports and major cities for the storage of the shipping oil, which is adulterated and resold as home and automotive oil.

An estimated 20 percent of fuel oil sold in the Greek market comes from illegal trade. Gas stations in Greece are said to offer fuel that is a more lucrative blend of legally purchased fuel and black market fuel, allowing retailers to realize higher profits and avoid excise duties.

Though Greece shows a mathematically impossible volume of petroleum exports to neighboring countries, the bills of laden do not add up, with oil tankers departing for their expressed destinations but then turning around and rerouting the ships back home for illegal sale on the domestic market.

According to one local newspaper, “Greece’s major energy companies still systematically engage in fictitious exports of fuels and illegal re-importations, providing huge profits on which no taxes are paid.”

Greece’s long tradition of oil smuggling and breaking oil embargoes has harmed domestic competition and led to a serious expansion of criminal activities in neighboring countries as organized crime syndicates foray into the energy sector.

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