In March 2019, the Tunisian government announced an increase in the fuel price; the latest in a series of increases that first began a decade ago. The price per litre has risen from Tunisian dinar (TND)1.270 (€0.38) in 2009 to TND2.065 (€0.62) in April 2019, and has triggered street protests by taxi and minibus drivers and motor hauliers.
In neighbouring Algeria, fuel is highly subsidised and is among the cheapest in the world, with price ranges from €0.19 to €0.30. This differential has precipitated a highly lucrative illicit market for Algerian fuel in Tunisia. This trend is facilitated by the fact that the border between the two countries is long and characterised by mountains and forests in the north and desert in the south, with multiple crossing points and many opportunities for smuggling. As a result, authorities in both countries struggle to control cross-border movement and activities.
Commenting on the extent of the smuggling in a report entitled Tunisia’s Borders: Jihadism and Contraband, International Crisis Group (ICG) notes that ‘fuel is the king of smuggled merchandise and provides a prosperous lucrative source of income for many Algerians and Tunisians living in those regions’.
Tunisian car owners often travel to Algerian cities such as El Oued, which are located close to the border, in search of inexpensive fuel. Algerian customs authorities estimate that an average of 500 people cross the border every day, according to the ICG report, 3 500 vehicles were implicated in smuggling activities in 2013.
The economic marginalisation of border regions and the lack of alternative business opportunities are often cited as the main drivers of the smuggling of fuel and other goods, ranging from staple products to illicit arms and drugs. In these regions, hundreds of thousands of people rely entirely on the informal sector, particularly the profitable trade in fuel.
In a book titled The State of Injustice in the Maghreb, political science researcher Hamza Meddeb explains that illegal smuggling plays a major role in the ‘border economy’. Although it is both illegal and damaging to the formal economy, perpetrators believe this informal element is integral to the economic reality in regions such as Kasserine, located in central-western Tunisia. Close to the Algerian border, this is the least developed region in Tunisia.
The journey of the smuggled fuel begins in Algeria, where smugglers await the tankers that supply petrol stations. They illicitly purchase fuel from the tankers, and take it to remote storage points. The fuel is then transported to Tunisia on donkeys or in cars, evading security controls, national guards and army patrols.
Once they have crossed the border, Tunisian smugglers carrying plastic containers find their Algerian counterparts either at ad hoc selling points, or in dedicated warehouses. Fearing capture by the Algerian army, Tunisian smugglers rarely enter Algeria, and typically wait some distance away from the border.
A survey conducted in 2017 estimated that the illicit fuel market constitutes 30% of fuel sales in the country, and involves some 20 000 actors, including cross-border smugglers, local transporters, owners and workers in illegal storage points, sellers and buyers.
Fuel smuggling existed long before the Tunisian revolution, but was previously controlled by families close to the Ben Ali regime. Since the revolution, this control has loosened to include wider networks.
The deterioration in Tunisia’s economy has contributed substantially to the problem, and corruption plays a prominent role, with the system relying on complicity between smugglers and security personnel. To avoid being caught, having their merchandise seized and being prosecuted, smugglers bribe security and customs officers posted along the borders. In that sense, fuel smuggling also provides a lucrative income for implicated security agents.
World Bank experts define informal trade as ‘the flow of goods that are unreported or incorrectly reported by the country's customs authorities’. In the absence of strong political will or the capacity to fight smuggling efficiently, security agents – who are poorly paid and exposed to dangers, including terrorist threats – have little incentive to combat the practice.
In other cases, security agents and customs turn a blind eye to the smuggling either because they sympathise with the smugglers, or to avoid facing retaliation or violence if they report smugglers or demand the relevant taxes.
The use of unregulated smuggled fuel, which may not comply with international health standards, may constitute a danger both to vehicles and to the environment. It also affects the livelihood of private fuel suppliers, especially in remote regions. In 2016, 40 petrol stations closed – allegedly as a result of this practice. Fuel smuggling also harms state revenues. The parallel economy in Tunisia, for example, has resulted in revenue losses of an estimated TND2.6 billion (€0.78 billion).
Attempts have been made to introduce measures to tackle the issue, among them the imposition of penalties, but these have not been implemented strictly. One reason for this is that the parallel economy is regarded as a necessary evil and a ‘safety valve’ that serves to contain other forms of criminality and social violence, and therefore helps to reduce unemployment along border regions. As long as these regions continue to depend on the parallel economy, the fight against the smuggling of fuel and other goods will continue.
One Tunisian customs services officer told ENACT that he strongly advocated for the creation of free trade zones in border regions and a review of tax regimes, in order to integrate informal trade into the formal market and overcome the current deadlock.
Although improved border controls and monitoring systems for security agents and customs officials may help to contain the problem, these measures alone are not sufficient. Tunisian authorities should address the incentives for those who smuggle and purchase fuel – including the significant price difference between fuel in Tunisia and neighbouring countries.
Rim Dhaouadi, Researcher, ENACT, ISS
