Billions lost to fuel smugglers — Remulla

Justice Secretary Jesus Crispin Remulla said the Philippines could be losing hundreds of billions of pesos due to syndicates involved in fuel pilferage.

Remulla made the disclosure during the Wednesday Kapihan with reporters covering the Department of Justice (DoJ).

“We need to study this because our country is suffering due to the ‘paihi’ scheme and the oil pilferage and smuggling syndicates as billions of pesos are being lost from the national treasury,” Remulla said in Filipino.

He said the DoJ is intensifying its investigation into the widespread “paihi” scheme, which is causing significant financial losses through oil smuggling and pilferage.

Remulla detailed two primary types of “paihi” operations. The first involves the illicit transfer of oil between ships to evade the payment of taxes to the Bureau of Customs, while the second involves bulk suppliers of oil.

“In these schemes,” Remulla explained, “they siphon off a certain percentage of the oil and then pass the cost onto consumers by inflating oil prices to cover their systems loss.”

Following a meeting with Bureau of Internal Revenue Commissioner RomeoLumagui Jr., Remulla estimated that “we could be losing hundreds of billions of pesos due to the syndicates involved in fuel pilferage.”

The DoJ-led Bataan Oil Spill Inter-Agency Investigation is currently probing the three vessels — the MT Terranova, MT Jason Bradley and MV Mirola 1 — that were involved in last month’s oil spill off Bataan for possible involvement in the pilferage schemes.

Remulla described the investigation as revealing a deeply troubling issue that has been quietly tolerated in the Philippines.

“This is the ‘paihi,’” he said, adding that a Batangas group involved in the pilferage is particularly notorious.

“The Batangas syndicate is dangerous,” Remulla warned. “Many have died because they eliminate those who oppose them. We have asked the National Bureau of Investigation to assist in addressing this problem and putting an end to the ‘paihi’ system.”

Remulla emphasized the need for a comprehensive crackdown on these syndicates to prevent further losses and ensure that the revenue meant for the country’s development are not siphoned off in these criminal operations.