It’s Tuesday morning and about three dozen vehicles are waiting for the fuel truck to arrive at a service station on the island of Belitung, Indonesia. Soon, a steady stream of cars will buy all the subsidized diesel and many of the drivers will then siphon their ration into jerry cans to sell at a profit.
The daily ritual is one step in a series of scams that range from car owners earning a few hundred dollars, to organized crime syndicates making millions out of Indonesia’s lopsided fuel distribution system. The pervasive fraud, which has embroiled people from all walks of life, from provincial officials to the armed forces, takes advantage of subsidies that cost the government more than $20 billion a year and lures hundreds of thousands of Indonesians into breaking the law.
“With the discrepancy between the price of subsidized fuel and market value, smuggling, hoarding and deliberate scarcity are normal,” said Achmad Sukarsono, an associate fellow at the Habibie Center, a research institute in Jakarta. “It can be a lucrative business involving soldiers, policemen and violent incidents.”