The Transnational Alliance to Combat Illicit Trade (TRACIT) is urging governments and businesses to unite against the global problem of illicit petroleum trade.

TRACIT estimates that every year $133 billion of fuels are stolen, adulterated or defrauded from legitimate petroleum companies, with significant losses to governments through subsidy abuse and tax evasion.

“Illicit trade in oil and fuels is an emerging global threat that has largely remained unchecked and hidden from international attention,” said TRACIT Director-General Jeffrey Hardy. TRACIT is an independent, private sector initiative that mobilizes businesses across industry sectors most impacted by illicit trade.

Hardy joined some of world’s foremost experts on illicit upstream and downstream petroleum trade at the first global Oil and Fuel Theft conference held in Geneva, Switzerland, in April. The speakers included an impressive list of experts, national oil companies, and government officials from the Philippines, Uganda, Ghana, Lithuania, Hungary, Iraq, Libya and other countries.

“Fuel smuggling is a reality and deeply embedded in many economies worldwide,” said Dakila Cua, chairman of the House Committee on Ways and Means in the Republic of Philippines. “This is a vicious practice that deprives governments of precious revenues for investment in infrastructure and other public goods.”

Participants discussed the severe negative effects from fuel theft on business, governments and the environment, as well as the need for new strategies and alliances to address this scourge. Technology solutions, such as fuel marking, are critical to reducing fuel fraud and minimize fuel-related tax evasion and subsidy abuse. But even these require collaboration among the private sector, governments and civil society.

In response, Hardy announced a new initiative to integrate oil and fuel theft into TRACIT’s cross-sector approach to fighting illicit trade, and to press for more rationalized policy frameworks and interconnected enforcement.

“We will concentrate on the key governance bodies responsible for providing guidance, best practices and capacity-building to their member states,” said Hardy. “More needs to be done to improve regulatory structures, set deterrent penalties, rationalize tax policies, strengthen capacity for more effective enforcement and educate consumers.”