Oil imported for NATO’s Resolute Support Mission (RSM) and Afghan security forces are exempt from customs duties. An investigation reveals it is being diverted and sold commercially.
Killid has got access to information that shows a steady rise in oil imports for RSM from 2014 after declining between 2012 and 2013 as foreign troops began pulling out.
Every year, between 2.7 and 3.5 million metric tonnes of oil is imported. More than 50 percent is for RSM and Afghan security forces, and exempt from paying taxes to the government.
Based on an “exemption letter” issued by the state-owned oil and gas enterprise State Owned Enterprise of Oil and Gas all imports for the military are exempted from paying 200 USD per tonnes of oil at the border. Figures provided by the directorate general of customs to Killid show an overall decrease in oil imports, but the share of “exempted oil” has increased in the last two years. While 2.2 million tonnes of oil were imported for the international forces in 2010, in 2013, after the exit of a part of the international forces, imports had decreased to 1.014 tonnes. Ahmad Reshad Popal, director-general customs, says that though the figure for imports shows a 50 percent decrease, imports for the military show a steady increase. Tax collections for oil imports were 5.4 billion Afs in 2011. That has shrunk in recent years despite the increase in transit tax.
The following table details the exempted and taxed oil based on figures given by the custom offices:
Income for government from taxed oil Quantity of taxed oil Quantity of exempted oil Year
5.4 billion Afs 1.7 million tonne 1.014 million tonnes 2013
3.3 billion Afs 1.01 million tonne 1.2 million tonne 2014
4.2 billion Afs 0.96 million tonne 1.09 million tonne 2015
Officials in fuel and liquid gas presidency believe tax-exempted oil is selling freely in the market, which is a big loss of income for the government.
No transparency
Killid tried to get figures of oil imports from NATO but officials in the press office as well as the Afghan government stonewalled attempts. Azerakhsh Hafezi, head of fuel union, estimates from an informal survey of the real needs of NATO and Afghan military services are between 300,000 and 320,000 tonnes of oil. Official figures from the customs office given to Killid say oil imported in the name of NATO and Afghan forces every year is more than one million tonnes. Where is all this fuel going?
Officials in the Ministry of Finance and state-owned enterprise are not commenting on the illegal exemption of custom duties on oil sold commercially, but an independent, joint-committee of monitoring and evaluation in the counter-corruption office that has researched the issue has written in its report that forging takes place in the “forms” for tax exemption. Companies that have the right to import oil are buying the forms for fuel without paying customs duty.
Hafezi believes millions of dollars have been lost to the government. The directorate of customs fixes taxes:
Tax Type of Oil S/N
148 $ Diesel 62-02 1
161 $/tonne Diesel 62-05 2
154 $/tonne Petrol A-92 3
257 $/tonne Oil of JET A1 4
230 $/tonne Oil for Aircraft TS1 5
Flourishing corruption
Walid Tamim, head of the state-owned oil company, thinks the government needs a law to check the illegal fuel business. Most of the exempted oil is entering through the dry ports of Islam Qala, Aqina and Hairatan. He says the general presidency of fuel has all the documents that show oil being imported under the name of exempted oil and sold freely in the open market. He says roughly two thirds of the petrol sold has not been taxed, and 98 percent of fuel for aircraft is tax-exempted. Profit from the illegal business is going into the pockets of private individuals.
A source in the custom office in Torghondi port has given Killid figures of taxed and untaxed fuel imports for the current fiscal year and last fiscal year. Figures are in kilogrammes.
Decrease Increase Year 2016 Year 2015 Item/kind
11929305 8099211 20028516 Taxed oil
88169115 159357321 71188206 Exempted oil
9161684 256378140 247216456 Gas
The source said the major buyers of untaxed oil are the ministries of interior affairs and defence and also the command headquarters of Resolute Support Mission, but there is no transparency in the contract process.
In denial
Authorities in the ministries of defence and interior affairs would not comment except to say they were aware of details of the contracts.
Najeeb Danish, deputy spokesperson for the Ministry of Interior Affairs, told Killid imports of oil were monitored and in case of corruption serious action would be taken.
His counterpart Mohammad Radmanesh in the Ministry of Defence told Killid the ministry was not aware of the sale of exempted oil in the bazaar.
The spokesperson for the Resolute Support Mission Brig-General Charles H. Cleveland wrote in reply to a formal email from Killid that it was NATO policy not to share information with the media.
The directorate general of customs rejected allegations of abuse in the use of exempted oil, saying they would act only if they receive evidence of misuse.
Minister of Commerce Humayoon Rasa told Killid on Oct 15 last year, “I confirm that there are companies that abuse the name of exempted oil. Recently I shared the issue with cabinet and president, (and) the president has ordered to set up a commission to find out the basic problems and uproot them. The commission had been formed from the representative of the ministries of foreign affairs, finance, commerce and international institutions – ISAF and NATO.” What did the commission find?
Musafar Quqandi, the commerce ministry spokesperson, promised to share the results of the commission but at the end backtracked and did not provide further details.
Where does the oil and gas go?
Walid Tamim, head of the state-owned fuel and liquid gas company, says that some gas traders may be smuggling the excess out of the country because of poor monitoring on the borders.
He also told Killid that the state-owned oil enterprise presidency has received reports that importing companies that for instance purchase gas for Afghanistan in Turkmenistan, sell it to foreign companies there.
Tamim calculates 25,000 tonnes of additional gas was imported this year compared to the two quarters of the last fiscal year. It may be that internal use by people has gone up, he adds. A source in Torghondi port, who did not want to reveal the name, told Killid gas imports increased by 9,161 tonnes in first nine months of the present fiscal year.
The figures for liquid gas through Torghondi that was given to Killid for 2015 are 247,216 tonnes, and for the last nine months 256,378 tonnes. However, Hafezi, the head of gas and oil importers’ union, dismisses allegations of gas smuggling and illegal sale by private players and instead accuses the government of hoarding. He claimed the presidency of state-owned fuel enterprise has 15,000 tonnes of gas in its stocks but does not sell.
