According to a top Colombia energy official, as much as 10 million gallons of illegal gasoline is smuggled every month into the country’s northeastern Cesar department from Venezuela by “terrorists and paramilitaries,” evidence of the diversity of criminal activity in the region and the size of the illegal market.
Mauricio Cardenas, Minister of Mines and Energy, told Colombia’s legislature that the illegal gasoline trade employs up to 15,000 people in Cesar and the neighboring Guajira departments.
Cardenas noted that negotiations with Venezuela to increase the supply of gasoline in Colombia, as well as a proposed reduction in the national gas tax, would both, if enacted, reduce the incentive for gasoline smuggling.
InSight Crime Analysis
InSight has reported on the phenomenon of Colombian criminal enterprises diversifying their funding sources. If the large amount of illegal gasoline entering Cesar is truly controlled by organized crime, as Cardenas suggests, it likely represents a significant source of income. Since gasoline is sold on the black market, its actual price is difficult to estimate, but the difference in price between the two countries’ markets is staggering.
Gasoline in Venezuela can be purchased legally for as little as 18 cents a gallon, due to heavy subsidies. On the other hand, legal gasoline in Colombia costs around $3.50 a gallon. This provides an opportunity for criminal groups to buy cheap gasoline in one country and sell it in the other, for a potential profit of close to 2000 percent.