Haiti's oil industry caught between U.S. terrorist label, gangs' enforced tolls
As Port-au-Prince plunged into darkness last week after someone sabotaged the country's main power plant, Haiti's main fuel suppliers warned that the entire economy could soon shut down due to an 'imminent risk of a complete paralysis of the petroleum sector.'
The warning was issued in a letter to Prime Minister Alix Didier Fils-Aimé, and leaked after authorities failed to respond to the Association of Petroleum Professionals' alarming cry for help. In the two-page letter, association president Randolph Rameau cited Haiti's widespread gang violence, which according to the United Nations has shuttered more than 1,600 schools and displaced over 50,000 people over the past four months.
But industry insiders and individuals close to the association's five major oil companies say the 'extremely worrying' situation is much more complicated. The industry's problem have been made worse by Washington's recent counter-terrorism measures against the gangs, and by the gangs raising the extortion rates they charge for the use of roads they control.
'There's the financial issue, the security problems, the international sanctions,' said a businessman knowledgeable about the industry who asked for anonymity to discuss the sensitive issues driving the latest crisis in the oil distribution chain. 'It's hell; it's really hellish.'
READ MORE: Haiti gang leader 'Yonyon' found guilty of kidnapping 16 U.S. missionaries
Earlier this month, the Trump administration designated Haiti's major gangs as foreign and global terrorists, and warned that anyone providing 'material support' risks being sanctioned and criminally charged. Unfazed by the threat, armed gangs have doubled the charges for the use of roads as they continue to set major businesses and homes ablaze.
In the aftermath of the designation, some fuel truck drivers have stopped working, fearing being labeled terrorists by Washington. Others, seeing competitors take their clients, have been forced to negotiate with gangs to keep food on their table and the country running.
'When a driver comes to you and say 'The gangs have increased the tolls to 50,000 gourdes' [about $380] you have a choice. Pay him to deliver the gas or don't pay and paralyze the country,' said an industry insider, noting drivers aren't the only ones fearing sanctions. 'We have to make a choice: 'Do I support the gangs or keep the country's economy running?''
Even before the Trump administration designated the Viv Ansanm gang coalition, which controls up to 90% of the capital, and the Gran Grif gang in the Artibonite region as Foreign Terrorist Organizations and Specially Designated Global Terrorists, fuel suppliers in Haiti were already under pressure.
Armed gangs blocked the entrance to ports by digging trenches and putting up barricades. When the barriers failed to get them what they wanted, they hijacked and kidnapped fuel truck drivers and their cargo, and charged exorbitant ransoms. The instability repeatedly caused disruptions in the fuel supply chain as service stations in metropolitan Port-au-Prince and in the provinces ran low on supplies.
'These poor guys are taking a huge risk with their life,' said a supplier about the drivers. 'They are really doing a hard job, but they will be the first ones to be sanctioned.'
There are five major players in Haiti's petroleum sector and all depend on others to transport fuel. About 80% of the trucks are owned by fuel distributors who provide their own transportation, while the other 20% are independent contractors affiliated with the oil companies, Rameau, the president of the Association of Petroleum Professionals, told the Miami Herald.
Haiti's major gangs, which made their debut as an allied force last year, run various extortion rackets, which are used to buy illegal weapons and ammunition and pay their members, as well as trafficking in guns and drugs and kidnapping for ransom. They also charge bus drivers and passengers to use gang-controlled roads.
Finance Minister Alfred Metellus recently estimated that gangs were pulling in $60 million to $70 million annually just from extortions for the movement of cargo containers The money from fuel truck drivers are in addition to that.
There are roughly 100 trucks involved in the daily delivery of fuel. But while the Haitian government pays pays 11 gourdes per gallon in transport fees, the average cost to the sector works out to be about 45 gourdes, or 34 cents, executives say. The 34 gourdes deficit was already cutting into profit margins before gangs doubled their fees on May 2, the same day of the U.S. terrorist designation announcement.
Today, the gang's fee for every truck entering the fuel terminal is 50,000 gourdes, one transporter said. If the fuel trucks are staying inside the terminal to load a barge headed to other regions of the country, they pay another 50,000 gourdes. If the truck exits and heads to the government port, the driver must pay 75,000 gourdes, about $570, which goes to just one gang that is stationed in front of the terminal. That gang alone is making close to $1 million per month, the transporter said.
Traveling outside the capital by road is even more costly. Drivers have to pay in some cases up to 600,000 gourdes, about $4,590, in tolls for Cap-Haïtien, and up up 700,000 gourdes, or $5,352, to Hinche, in the Central Plateau, the Nouvelliste newspaper reported.
'Sometimes a driver of a truck has to pay five different gangs,' said the supplier, stressing the drivers, not the oil companies themselves, are making the payments to gangs.
Haiti, at least one oil company director believes, could be in a dangerously short supply of fuel in as little as 10 days.
'If it keeps on like this, the gangsters will win,' one director said. 'The industry will be unable to keep on working under these conditions. The main concern is how we keep on operating in this context where the government doesn't do anything,' the director said.
Securing strategic facilities like the seaports, airport, the electrical grid and major roads were pitched as key reasons for the need for an armed international mission in Haiti after armed gang members blocked the entrances to the Varreux seaport in 2021 and 2022. The blockades led to crippling fuel shortages and a humanitarian crisis as people struggled to find food and water.
But attacks by gangs against key government installations, including the main international airport, and the shutdown of the Péligre hydroelectric power plant in the Central Plateau last week show that the Kenya-led Multinational Security Support and Haitian police remain at the mercy of armed groups.
'People function in Haiti today because they directly or indirectly accept what the gangs are demanding,' the industry insider said, noting Haitians need clarity on what the U.S. terrorist designation means when it uses the term 'financing gangs.'
Washington's use of the terrorist designation to clamp down on the spiraling gang crisis is intended to weaken gangs. But humanitarian aid groups and nongovernmental organizations fear it could inadvertently worsen the situation on the ground by impeding humanitarian assistance, strengthening gang governance and empowering broader criminal networks.
'There is growing concern within the aid community that organizations could lose funding or face legal risks – including prosecution. Under the terrorist designation, the assistance they provide could now be classified as 'material support' to terrorist groups,' the Global Initiative Against Transnational Organized Crime wrote in an analysis after the designation.
The U.S. State Department declined to answer specific questions Haitians about navigating the designation in which gangs extort payments.
The designations 'protect U.S. national security interests and our hemisphere. That means giving law enforcement additional tools to counter these violent criminal gangs terrorizing the Haitian people and the people supporting these gangs,' a State Department spokesperson said. 'Those who knowingly fund these gangs—whether they be in Haiti or elsewhere —will be subject to criminal prosecution in the United States and they and their families risk losing the ability to travel to the United States.'
The Global Initiative Against Transnational Organized report notes that U.S. policy provides for exemptions to mitigate against risks by allowing, for example, humanitarian activities to continue even with the designation. However, the State Department has not publicized this and has not provided any guidance for Haiti.
'You're putting people in a difficult situation without coming up with a solution,' said a frustrated political leader. 'If you say you're going to [issue the designation] and you're coming in with 2,000 troops to get these gangs by next week or even in three months and you tell us to wait, we'll find a way to stay. But you're not offering a solution. Give us an idea, give us a time frame, tell us how long we have to suffer.'
The government, the leader added, 'has collapsed completely and they are closing their eyes and their ears like they don't understand or they don't know it. They're not taking care of the problem.'
The absence of leadership, several petroleum industry insiders say, fueled the letter to Fils-Aimé after he and members of the Transitional Presidential Council failed to address their concerns.
'The current situation has reached a critical point,' Rameau, the petroleum association presidential, said.
'We cannot go on like this, because it's costing more and more, and eating the margins, and the drivers are between a rock and a hard place,' said the businessman close to the oil sector. 'They are saying, 'I just can take it anymore.''
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