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Iraqi smugglers defy coalition and retain best oil prices

BASRA, Iraq—Salah Hussein gingerly pulled back palm fronds to reveal a riverbank where Iraqi smugglers loaded stolen fuel onto a ship Wednesday morning.

"This is as close as we can get," he whispered. "If they knew we were watching, they would kill us."

Hussein's farm, ringed by a thick wall of foliage, sits on a remote beach at the confluence of the Tigris and Euphrates rivers, where oil smugglers evade British soldiers.

Coalition forces have urged residents to report such activity, but 48-year-old Hussein said he doesn't dare disrupt the criminals who are diverting Iraq's most precious resource to neighboring countries and the local black market.

Smugglers reroute thousands of tons of petroleum products a week, enough fuel to meet the city's needs, and their operations contributed to the fuel shortage that led to deadly riots last weekend in the southern Iraqi city of Basra.

The British have seized 74 tanker trucks in the past month to prevent oil, gasoline and kerosene from ending up on barges destined for Iran, the United Arab Emirates and Kuwait. They're also training Iraqi police to infiltrate smuggling rings that hire children to stand along busy intersections and flag down drivers for cheap, watered-down gas.

Smugglers, however, continue to offer the best prices to suppliers and the best jobs for impoverished residents who wait hours for a few quarts of legal gasoline while puddles of crude oil blacken the desert around them.

"The British have destroyed my jerry cans and run me off, but I have no other job," said 14-year-old Haider Jassem, twirling a plastic hose on a main street Tuesday to signal that he had illegal fuel. "I wish I could sell vegetables in the market, but the smugglers pay me better."

Maj. Charlie Mayo, spokesman for coalition forces in Basra, said Tuesday that armed military escorts now accompany drivers from refineries to prevent them from being robbed or bribed of their cargo. Until recently, Mayo said, tanker drivers sneaked out at dawn to deliver fuel to seamen at the Shatt al Arab waterway, historically one of the Middle East's busiest trade routes.

"Imagine my surprise when (a journalist) told me he'd been up and down the track and saw no tankers and no barges," Mayo said. "The seamen there said there had been no tankers for 10 days. Maybe it's beginning to work."

Smugglers, however, said they're outsmarting the British by carrying fuel in smaller, less conspicuous trucks often labeled "Drinking Water." They also claim to pay off Iraqi police who are hesitant to curtail a way of life that existed—albeit to a lesser extent—under former Iraqi leader Saddam Hussein.

"We seize the tankers but the drivers go free," said Salem Hassan, 18, an Iraqi police officer assigned to the port. "If we arrest them, the merchants come and threaten us to our faces."

One of the most outspoken traffickers is Mohamed Jasem Ali, who comes from three generations of smugglers in the tiny town of Abu Khaseeb, just outside Basra near the Iranian border.

On Wednesday, he and his workers repaired a small cart they use for transporting barrels of fuel since the British banned private trucks that hold more than 9,500 gallons. After pausing to return the friendly greetings of passing Iraqi policemen, Ali said his enterprise helps local families by providing jobs.

"Look at that guy—selling ice cream to support seven children," Ali said, pointing to a sidewalk vendor. "He should come work for me."

Many Basra residents, however, said smuggling creates yet another hardship for an area that suffered terribly under Saddam and now struggles for basic utilities under the coalition.

The chronic fuel shortage has shut down taxi services and prevented workers from reaching jobs in distant cities. Frustration reached a boiling point Saturday, when riots broke out in which at least two Iraqis reportedly were killed and several British soldiers were injured by stones. Loosely organized groups in Basra promise more violence by Friday unless they see an immediate improvement in the fuel supply.

"Some weak people want to damage this society and they are nothing more than war merchants," said Abdi Jalil Nasser, 47, a Shiite who preaches against smuggling to tanker drivers at the local refinery. "Saddam's regime kept its eyes on the drivers. Now, there's no oversight."

Mayo said the military took emergency measures such as releasing private fuel stocks and importing gasoline via waterways to ease the situation. Drivers are now issued vouchers at the refinery to make them accountable when fuel doesn't reach gas stations.

Coalition officials also are working to restore electrical lines severed by sabotage and poor maintenance to help the refinery reach its maximum output of 190,000 barrels a day. Now, the refinery churns out 100,000 barrels on a good day, said Jamal Dawood Salman, the refinery's chief engineer.

That fuel supply should be more than enough for Basra and the entire south of Iraq, he said, except that thousands of tons never make it to the pumps.

"Frankly, most of the drivers are smugglers and that's our problem," Salman said. "We've tried everything—to capture tankers, burn tankers, shoot tankers. But there are many gates to the black market, and we can't watch them all."


(c) 2003, Knight Ridder/Tribune Information Services.

PHOTOS (from KRT Photo Service, 202-383-6099): USIRAQ-SMUGGLERS